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ELEMENTS        ^n 


POLITICAL  Economy 


WITH  SPKCIAL  RBFERBNCK  TO  TUE 


INDUSTRIAL  HISTORY  OF  NATIONS 


BY 

ROBERT  ELLIS  THOMPSON,  M.A., 

PROFESSOR  OF  SOCIAL  SCIENCE  IN  THE  UNIVERSITY  OF  PENNSYLVANIA, 
AND  MEMBER  OF  TUE  AMERICAN  PHILOSOPHICAL  SOCIETY. 


"  The  true  greatness  of  kingdoms  and  estates,  and  the  means  thereof,  is  an  argu- 
ment fit  for  groat  and  mighty  princes  to  have  in  their  hand  ;  to  the  end  that  neither 
by  overmeasuring  their  forces,  they  lose  themselves  in  vain  enterprises,  nor  on  the 
other  side,  by  undervaluing  them,  they  descend  to  fearful  and  pusillanimous  coun- 
sels."—Zk*rd  Bacon. 

OTIVBRSITT] 

[A: 
PORTER   &   COATE 


Copyright  by  Porter  &  Coates,  1875. 


lX>pyrigbt  by  Poetkr  &  Coates,  188? 


PREFACE 


This  work  forms  a  third  and  revised  edition  of  the  author's 
"  Social  Science  and  National  Economy,"  published  in  1875, 
and  in  a  revised  editidii  in  the  following  year.  The  author 
retains  his  preference  for  the  earlier  title,  but  the  general  use 
of  the  term  Political  Economy  to  designate  this  science  ren- 
ders it  desirable  to  make  this  change. 

The  author  of  this  book  has  had  a  twofold  purpose  in  its 
preparation,— ^rs<,  to  fiirnish  a  readable  discussion  of  the 
subject  for  the  use  of  those  who  wish  to  get  some  knowledge 
of  it,  but  have  neither  the  time  nor  the  inclination  to  study 
elaborate  or  voluminous  works ;  secondly y  and  more  especially, 
to  provide  a  text-book  for  those  teachers — in  colleges  and  else- 
where— who  approve  of  our  national  policy  as  in  the  main  the 
right  one,  and  who  wish  to  teach  the  principles  on  which  it  f  Jt^ 
rests  and  the  facts  by  which  it  is  justified.  Of  course  the 
book  is  not  exactly  what  it  would  have  been  had  either  of 
tliese  purposes  been  kept  singly  in  view.  Some  explanations 
are  given,  which  are  here  only  because  this  is  meant  to  be  a  text- 
book ;  there  are  discussions  of  a  political  kind,  for  instance, 
in  the  second  chapter,  whose  presence  is  necessitated  by  the 
fact  that  no  specific  instruction  in  political  philosophy  is 
ordinarily  given  in  our  college  courses,  and  the  teacher  of 

5 


6  PREFACE. 

National  Economy  cannot  always  assume  that  his  classes  ai-e 
already  familiar  with  the  conception  of  the  state  in  its  full 
significance.  On  the  other  hand,  in  the  closing  chapters,  what 
the  theological  controversialists  used  to  call  "the  present 
truth  "  has  been  stated  and  defended  with  a  fulness  which 
would  ordinarily  be  needless  in  a  text-book,  and  it  is  sug- 
gested that  in  the  use  of  those  chapters  a  selection  be  made, 
and  the  rest  omitted.  But  it  is  believed  that  nothing  has  been 
inserted,  and  it  is  hoped  that  nothing  has  been  omitted,  whose 
insertion  or  omission  will  interfere  with  either  purpose  of  the 
book. 

The  form  of  the  book  is  entirely  different  from  the  ordinary 
arrangement  under  the  three  rubrics,  "  Production,  Distribu- 
tion and  Consumption."     The^method-j^ursued  of  itself  ex- 
cludes that  artificial  and  symmetrical  distribution  of  its  parts 
which — the  author   believes — sacrifices    life  and   reality  to 

-^  system.  Whatever  interest  or  other  merits  the  book  possesses 
it  owes  to  the  method  which  underlies  its  construction.  In  so 
far   as  the  author  has  succeeded  in  being  faithful  to  that 

.  method,  he  must  have  succeeded  also  in  showing  that  this 
science  is  not  one  that  is  "  up  in  the  clouds,"  but  one  that 
^  touches  on  human  life  and  the  world's  history  at  all  points. 
The  author  has  had  access  to  the  library  of  the  late  Stephen 
Colwell,  Esq.,  now  in  possession  of  the  University,  and  only 
regrets  that  he  has  not  been  able  to  use  its  treasures  more 
freely.  It  contains  some  eight  thousand  books  and  pamphlets, 
whose  collection  occupied  Mr.  Colwell's  leisure  till  his  death  in 
1 869,  and  it  embraces  nearly  every  important  book,  periodical 
or  pamphlet  on  the  subject,  that  had  appeared  in  the  English, 
French  or  Italian  languages,  besides  a  large  number  in  German 
and  Spanish. 

^    Of  the  books  that  the  author  has  drawn  upon,  the  writings 
of  Mr.  Henry  C.  Carey  hold  the  first  place.     Then  come  those 


PREFACE.  7 

of  his  school — Dr.  Wm.  Elder,  Hon.  E.  Peshine  Smith  (es- 
pecially in  chapter  III.),  Dr.  E.  Duhring  (chapter  I.)  and 
Stephen  Colwell  (chapter  VIII.).  Free  use  has  also  l)een  made 
of  the  writings  of  Sir  Henry  S.  Maine  and  Rev.  E.  Mulford 
(chapter  II.),  W.  R.  Greg  (chapter  IV.),  Cliffe  Leslie,  Maine, 
and  E.  Laveleye  (chapter  V.),  W.  T.  Thornton  (chapter  VII.), 
R.  H.  Patterson  (chapter  VIII,),  J.  Noble  (chapter  IX.),  and 
Edward  Young  (chapter  XII.).  Other  authorities  are  specified 
in  the  notes  appended  to  various  paragraphs. 

For  the  correction  of  many  small  and  some  large  errors, 
and  for  suggestions  which  have  contributed  to  whatever  com- 
pleteness of  discussion  or  other  merits  the  book  possesses,  the 
author  is  greatly  indebted  to  the  kindness  of  Cyrus  Elder, 
Esq.,  of  Johnstown,  to  Joseph  Wharton,  Esq.,  and  especially 
to  his  friend  Wharton  Barker,  Esq.,  to  whose  encouragement 
this  book  owes  its  existence. 

University  of  Pennsylvania, 


CONTENTS 


CHAPTER  I. 

PAGB 

Definition  and  History  of  the  Science 11 

CHAPTER  II. 
The  Development  of  Society. — ^The  Nation 32 

CHAPTER  III. 
Wealth  and  Nature 41 

CHAPTER  IV. 
The  Science  and  Economy  of  Population 49 

CHAPTER  V. 
The  National  Economy  of  Land 70 

CHAPTER  VI. 

The    National    Economy  of    Land   {cmtinued).— How 
the  Earth  was  Occupied 101 

CHAPTER  VII. 
The  National  Economy  of  Labor 115 

CHAPTER  VIII. 
The  Science  and  Economy  of  Money 142 


10  CONTENTS. 

CHAPTER  IX. 

PAGB 

National  Economy  of  Finance  and  Taxation 179 

CHAPTER  X. 
The  Science  and  Economy  of  Commerce 197 

CHAPTER  XI. 

The  Science  and  Economy  of  Manufactures.— The 
Theory 21S 

CHAPTER  XII. 

The  Science  and  Economy  of  Manufactures. — The 
Practice 267 

CHAPTER  XIII. 

The    Science    and    Economy    of   Intelligence    and 
Education 365 


[TJHIVSESITTj 
POLITICAL   ECONOMY. 


CHAPTER  FIRST. 
Definition  and  History  op  the  Science. 

§  1.  Political  or  National  Economy  is  that  branch  of  the 
science  of  man  which  treats  of  man  as  existing  in  society,  and 
in  relation  to  his  material  wants  and  welfare.  It  is  therefore  a 
subdivision  of  the  science  of  Sociology,  or  the  science  of  social 
relations,  which  itself  is  a  subdivision  of  the  greater  science  of 
Anthropology,  or  the  science  of  man. 

§  2.  It  has  been  objected  by  some  that  there  can  be  no  such 
thing  as  a  science  of  man.  "  Science,"  they  say,  "  deals  only 
with  things  whose  actions  and  reactions  can  be  foretold,  after  we 
have  mastered  the  general  laws  by  which  they  are  governed. 
The  test  of  science,  as  Comte  says,  is  the  power  of  prediction. 
There  is  a  science  of  Chemistry,  because  there  is  a  possibility 
of  foretelling  what  compound  will  be  produced  by  the  union  of 
any  two  elements  or  known  compounds.  But  man  is  not 
governed  by  laws  of  that  sort ;  he  is  a  being  possessed  of  aflFec 
tions  and  a  will,  which  often  act  in  the  most  arbitrary  way, — in 
a  way  that  no  one  can  foresee  or  predict." 

This  objection  expresses  a  truth  which  can  never  be  left  out 
of  sight.  If  we  ignore  it  we  shall  miss  the  conditions  under 
which  man's  material  welfare  is  to  be  achieved.  Men  can  never 
be  put  to  a  good   use  of  any  sort,  while  they  are  regarded  or 

11 


12  ELEMENTS   OF   POLITICAL   ECONOMY. 

treated  as  things.  To  do  so  will  be  to  keep  them  poor,  as  well 
as  to  degrade  them  morally;  for  the  best  work  and  the  wisest 
economy  can  be  got  out  of  them,  only  by  bringing  their  free 
will  into  play  in  the  desirable  direction. 

But  the  possibility  of  constructing  a  science  of  man  does  not 
rest  upon  the  power  to  foresee  the  line  of  action  that  each  indi- 
vidual man  will  pursue.  Man  lives  in  a  world  which  his  will 
did  not  create,  and  whose  "  constitution  and  course  of  nature  " 
he  cannot  change.  If  he  act  in  violation  of  its  laws,  he  must 
take  the  penalty.  Thus  if  he  indulge  in  habits  that  contravene 
the  constitution  of  his  moral  nature,  then  moral  degradation, 
unhappiness  and  remorse  will  be  the  necessary  results.  Because 
there  is  such  a  moral  "  constitution  and  course  of  nature," 
there  is  a  science  of  ethics,  which  enables  us  to  predict,  not  the 
conduct  of  each  individual  man,  but  the  consequences  of  such 
conduct,  whatever  it  may  be.  /And  there  exists  equally  for 
society  an  economic  "  constitution  and  course  of  nature ;"  the 
nation  that  complies  with  its  laws  attains  to  material  well-being 
or  wealth,  and  the  nation  that  disobeys  them  inflicts  poverty 
upon  itself  as  a  whole,  or  upon  the  mass  of  its  people.  To  learn 
what  those  laws  are,  is  the  business  of  the  student  of  social 
science ;  to  govern  a  nation  according  to  them  is  the  business 
of  the  statesman,  and  is  the  art  of  national  economy. 

While  men  are  beings  possessed  of  a  will,  they  ordinarily  act 
from  motives.  This  is  especially  true  of  their  conduct  in  re- 
gard to  their  material  welfare;  in  this  connection  the  same 
motives  act  with  great  uniformity  upon  almost  all  men.  The 
same  wants  exist  for  all;  the  same  welfare  is  desired  by 
all;  so  that  in  this  department  of  the  science  of  man  there 
is  so  little  caprice,  that  there  is  nearly  as  much  power  to  foresee 
and  foretell  what  men  will  do,  as  in  some  of  the  sciences  to  fore- 
see Ihe  actions  of  things.  Nearly,  but  not  quite  so  much  ;  for 
while  men  are  agreed  as  to  the  end  here,  there  is  room  foi  dif- 
ference of  opinion  as  to  the  means,  and  consequently  for  variety 
of  action — for  wise  and  unwise  ways  of  procedure. 

§  3.  What  the  science  of  man  and  of  society  lacks  in  certainty, 


SOCIETY  A   PRIMARY   FACT.  13 

as  compared  with  the  sciences  of  nature,  it  more  thLn  makes  up  in 
the  higher  interest  that  it  excites.  Whatever  Science  deals  with 
our  own  species  and  its  fortunes,  comes  very  close  to  each  one  of 
us.  Whatever  it  can  tell  us  of  the  probable  future  of  our  nation, 
or  our  race,  concerns  us  more  than  predicted  eclipses  or  chemical 
discoveries.  The  most  brilliant  chemical  or  astronomical  cer- 
tainty could  not  move  an  Englishman  so  deeply  as  that  bare 
conjecture  of  Macaulay,  that  the  time  may  come  "  when  some 
traveller  from  New  Zealand  shall  take  his  seat  on  a  broken  arch 
of  Westminster  bridge  to  sketch  the  ruins  of  St.  Paul's."  The 
other  sciences  have  an  independent  value  ;  but  they  interest  us 
most  when  we  see  that  they  have  a  bearing  upon  this,  when 
they  open  still  larger  utilities  of  nature  to  human  possession, 
and  add  to  the  welfare  of  mankind.  We  ask  the  chemist: 
"  Shall  the  time  ever  come  when  we  shall  no  longer  be  dependent 
upon  our  coal  deposits  for  light  and  warmth,  but  shall  be  able  to 
produce  both  from  the  decomposition  of  water  V  We  ask  the 
physicist  :■"  Shall  we  soon  be  able  to  use  this  subtle,  omnipresent 
electric  force  as  a  motive  power  ?  Shall  we  ever  be  able  to 
move  through  the  air  in  manageable  balloons,  with  speed  and 
safety  ?"  These  are  not  the  greatest  problems  that  science  has 
to  solve,  but  they  have  an  interest  for  us  all  that  more  abstract 
questions  can  never  possess. 

§4.  Our  Science  considers  man  as  existiuQ  in  sociefi/ ;  we 
find  him,  indeed,  nowhere  else.  The  old  lawyers  and  political 
philosophers  talked  of  a  state  of  nature,  a  condition  of  savage 
isolation,  out  of  which  men  emerged  by  the  social  contract, 
through  which  society  was  first  constituted.  But  no  one  else 
has  any  news  from  that  country;  everywhere  men  exist  in  more 
or  less  perfectly  organized  society; — they  are  born  into  the 
society  of  the  family  without  any  choice  of  their  own  ;  and  they 
grow  up  as  members  of  tribes  or  nations,  that  grew  out  of 
families.  All  their  material  welfare  rests  upon  this  fact,  and 
must  be  considered  in  connection  with  it.  The  cooperation  by 
which  they  emerge  from  the  most  utter  poverty  to  wealth,  is 
possible  only  within  society  and  under  its  protection.     Upon 


14  ELEMENTS   OF   POLITICAL   ECONOMY. 

the  wise  management  of  its  general  policy,  and  the  efficiency 
of  its  government,  the  welfare  and  the  security  of  the  indi- 
vidual depend.  The  natural  right  to  property,  by  which  that 
welfare  is  perpetuated  from  day  to  day,  is  realized  only  in 
society.  The  transmission  of  the  things  that  contribute  to  ma- 
terial welfiire  from  one  generation  to  another — of  real  and  per- 
sonal property,  of  knowledge,  skill  and  methods  of  industry — 
would  be  impossible  but  for  the  existence  of  bodies  that  outlive 
the  single  life,  and  aim  at  their  own  perpetuation.  Vita  hrevis, 
ars  longa,  or  else  each  new  generation  would  have  to  begin  at 
the  foundation.  Hence  it  is  that  this  science  begins  with  the 
conception  of  social  state ;  not  with  the  study  of  wealth  in  the 
abstract,  nor  of  the  individual  man  and  his  desires. 

At  the  fall  of  the  civilized  societies  that  made  up  the  ancient  world, 
the  useful  arts  and  sciences  would  have  perished  in  Western  Europe 
with  the  politics  under  which  they  were  developed,  had  not  the  great 
Ucuc'lictinc  order  gathered  both  into  their  monasteries.  These  were 
at  once  schools  of  learning  and  industrial  establishments,  and  the  only 
places  safe  from  the  barbarous  intrusions  of  half-Christianized  bar- 
barians. 

§  5.  Political  economy  is  an  art  as  well  as  a  science.  The 
term  economy,  or  house-thrift,  does  not  mean  here  wise  saving, 
any  more  than  it  means  wise  spending.  It  is  borrowed  from  the 
management  of  the  first  and  simplest  of  all  human  societies,  the 
unit  out  of  which  all  other  societies  have  grown — the  family. 
Tlie  adjective  political  prefixed  indicates  the  transfer  of  the  con- 
ception of  thrift  to  the  society  which  exists  that  justice  may  be 
done  and  natural  rights  be  realized,  and  which  for  that  purpose 
i«  put  in  trust  with  the  lives  and  the  material  possessions  of  the 
whole  people. 

§  6.  The  art  of  political  economy  is  much  older  than  the 
Bcimce.  The  former  came  into  existence  with  the  first  nation, 
the  latter  began  to  be  studied  about  the  time  of  the  discovery 
of  America,  and  first  gained  a  place  as  a  recognised  science  a 
century  ago.  There  is  nothing  unusual  in  this,  for  nearly  every 
■cicnce  lags  for  a  time  behind  its  related  art.  Themistocles  knew 
"how  to  make  a  small  city  great"  long  before  Plato  and  Aristotle 


ART    BEFORE   SCIENCE.  15 

founded  the  science  of  politics.  Dyeing,  oooking,  and  a  thousand 
other  applications  of  chemistry  were  in  use  from  the  earliest 
historic  periods;  but  the  first  centennial  of  Dr.  Priestley's  dis- 
covery of  oxygen,  that  laid  the  foundation  of  that  science,  has 
been  celebrated  in  our  own  time.  Sometimes  the  two — the 
science  and  the  art — exist  together,  with  little  or  no  influence 
upon  each  other,  for  a  long  period.  Thus  there  was  for  centu- 
ries a  scieQce  of  music,  taught  and  studied  by  men  who  were 
not  practical  musicians;  while  those  that  were,  pursued  their  art 
without  giving  the  slightest  heed  to  the  science. 

All  human  experience  shows  that  science  can  be  of  the 
greatest  service  to  its  related  art.  As  chemistry  has  improved 
and  simplified  the  industrial  methods  that  existed  before  Priest- 
ley and  Lavoisier,  so  the  discovery  of  the  economic  laws  thut 
govern  the  advance  of  society  in  wealth,  has  greatly  changed 
for  the  better  the  economic  methods  of  the  nations.  Some  of 
the  older  empirical  rules  it  has  vindicated  as  right ;  others  it 
has  condemned  and  set  aside  as  wrong ;  it  has  suggested  new 
and  extended  the  applications  of  others  that  were  old.  It  runs 
the  risk,  indeed,  of  rejecting  some  methods  that  were  clearly 
right;  and  it  must  guard  against  this,  by  making  the  most 
careful  and  thorough  survey  of  all  the  facts  of  the  case. 

In  the  first  stages  of  a  science,  which  we  may  call  the  mechan- 
ical, empirical  rules  predominate  among  the  doctrines ;  but 
gradually  the  simpler  and  far  less  numerous  scientific  prmc?pZe« 
that  underlie  these  rules  are  perceived.  When  these  are  once 
grasped,  the  process  of  submitting  rules  to  the  test  of  principles 
is  an  easy  and  safe  one.  The  science  has  then  passed  into  its 
dynamical  stage. 

The  ancients  knew  no  science  of  political  or  national  economy. 
Commonplace  remarks  and  moralizing  reflections  on  the  subject 
are  found  scattered  here  and  there  through  their  literatures. 
Single  facts  that  could  hardly  escape  their  notice,  such  as  the 
advantage  of  the  division  of  labor,  and  of  the  transition  from 
barter  to  the  use  of  money,  and  the  diff"erenc€  between  value 
and  utility,  were  remarked  upon,  especially  by  Aristotle.     In 


16  ELEMENTS   OF  POLITICAL   ECONOMY. 

these  hints  lay  the  possible  germs  of  social  science,  but  they 
were  not  followed  up,  nor  the  underlying  laws  investigated. 

§  7.  The  rivalry  excited  in  other  parts  of  Europe,  by  the 
prosperity  of  Venice  and  Genoa,  first  led  men  to  study  the  sub- 
ject, and  we  find  it  occupying  a  place  in  the  literatures  of  Italy 
and  Spain,  France  and  England,  from  the  sixteenth  century. 
The  circumstances  of  the  times  gave  shape  to  these  studies. 
This  was  the  nationalist  period  of  history.  Europe  had  revolted 
against  all  the  schemes  of  a  universal  monarchy  ;  and  independ- 
ent sovereign  kingdoms,  with  national  languages  and  literatures, 
and  even  churches,  divided  its  area  among  them.  That  a  thing 
was  Spanish  or  was  English,  was  praise  enough  in  the  ears  of 
Spaniard  or  Englishman.  How  to  aggrandize  to  the  utmost  their 
own  country,  at  whatever  expense  to  others,  was  the  great 
problem  of  statesmanship,  especially  after  the  religious  heats, 
that  had.  divided  Europe  into  two  hostile  camps,  cooled  oflf 
somewhat.  And  of  all  means  to  that  end,  the  possession  of  an 
abundance  of  money  seemed  the  best  and  readiest.  After  a 
money-famine  that  had  begun  with  the  Christian  era,  and  had 
grown  in  intensity  for  fifteen  centuries,  the  discovery  of  America 
and  the  East  Indies  had  brought  in  a  vast  and  sudden  supply, 
which  had  given  Spain  for  a  time  an  undue  preponderance  in 
European  politics,  and  had  everywhere  bettered  the  condition  of 
the  people.  How  to  acquire  it  by  a  foreign  trade  that  would  give 
a  balance  in  favor  of  our  own  country, — how  to  keep  it  here  at 
home  for  general  circulation  and  national  uses  in  case  of  need, 
was  the  question.  The  Mercantile  school  of  writers,  as  they  are 
now  called,  set  themselves  to  find  methods.  As  a  rule  their 
books  were  corrective  of  common  errors ;  they  showed  that  the 
best  way  was  the  indirect  way,  —  to  stimulate  home  industry 
and  have  plenty  of  commodities  to  sell,  not  to  put  a  premium  on 
foreign  coins  and  prohibit  the  export  of  gold.  Theirs  was  a 
real  science,  but  in  the  mechanical  stage. 

Among  the  notable  writers  of  this  school  are  Antonio  Serra  (1613,  a 

Neapolitan) ;  Thomas  Munn  {England's  Treasure  by  Foreign  Trade,  1664); 

Andrew  Yarranton  (^/.y^inrf's  Improvement  hy  Land  and  Sea,  1677-81); 

John  Locke  {On  the  Interest  and  Value  of  Money,  1691  and  1698);  Sir 


1IIE   MERCANTILE   SCHOOL.  17 

Wm.  Petty  {EKHaya  t»»  Political  Arithmetic  1691).  Tho  systeinatio  writers 
are  tho  Abbe  Genovesi  {Lczzioni  di  Commcrcio  e  di  Ectnwniico  CiviUy 
1765)  and  Sir  James  Steuart  (Pn'iicipleii  of  /'ollticol  Kronouiy,  1767). 
Contemporary  opponents  are  Sir  Josiah  Child  [lirief  Ohiervatious  con- 
cernimj  Trade,  1668);  lo  Sieur  do  Boisguillebcrt  {Factum  dc  France, 
1712,  Ac.);  Marshal  Vauban  {Prnjel  d'nne  Dtinc  Roi/a/e,  1707);  and  J. 
F.  Melon  (Eisai  Politique  sur  le  Commerce,  1734.)  The  opinions  of  the 
Mercantile  school  are  wretchedly  caricatured  by  many  modern  writers. 

The  new  science  was  as  yet  a  very  subordinate  branch  of  tlic 
larger  subject  of  politics,  and  political  aims  predominated  in  its 
treatment  of  the  subject.  As  we  have  seen,  the  questions  that 
it  proposed  to  solve  were  not  of  its  own  suggestion,  but  were 
propounded  by  political  leaders.  It  was  not  yet  strong  enough 
to  take  the  initiative,  or  to  insist  on  the  benefit  of  an  economic 
policy  to  the  well-being  of  the  people.  The  final  end  held  in 
view,  both  in  theory  and  in  practice,  was  the  abundant  supply 
of  money  for  royal  coflFers,  and  the  practcce  was  far  behind  the 
theory.  The  most  absurd  financial  methods  were  kept  intact 
if  they  seemed  to  subserve  this  end.  Monopolies  were  created 
^ad  libitum,  and  sold  to  foreigners;  the  trade  between  provinces 
of  the  same  kingdom  was  burdened  with  customs-duties,  as  if 
between  separate  kingdoms ;  the  export  of  grain,  as  well  as  of 
gold,  was  prohibited,  that  its  price  might  be  kept  down  ]  the 
industry  created  and  fostered  with  one  hand,  was  crushed  under 
excessive  taxation  and  arbitrary  regulations  with  the  other. 
Even  the  great  Colbert,  whose  policy  was  the  grandest  and  most 
successful  illustration  of  all  of  the  best  and  some  of  the  worst 
teachings  of  the  school,  died  broken-hearted  with  the  ruin  of  his 
plans  through  the  royal  ambition  that  wasted  the  nation's 
resources  in  war,  and  the  royal  superstition  that  was  robbing 
France  of  millions  of  her  best  and  most  industrious  citizens. 

§  8.  The  second  school  is  that  of  the  Economistes  or  Phi/sio- 
a-ates^  founded  by  Quesnay,  the  physician  and  "thinker"  of 
Louis  XV.  If  the  mercantile  school  unduly  subordinated  the 
science  to  the  art,  the  Economistes  went  to  the  other  extreme 
and  made  a  complete  divorce  between  them.  Starting  from  a 
few  simple  ideas  as  the  postulates  of  the  science,  they  built  up  a 
2 


18  ELEMENTS   OF   POLITICAL   ECONOMY. 

fantastic  structure  of  deductions  and  theories,  that  stood  in  nc 
vital  relation  to  the  actual  life  of  society.  Their  professed  aim 
was  to  attain  a  natural  line  of  thought,  and  in  that  age  the 
*'  natural"  was  conceived  as  the  antithesis  of  civilization,  as 
then  existing. 

In  Quesnay's  view  nature, — by  which  he  meant  the  productive 
powers  of  the  soil, — is  the  sole  source  of  a  nation's  wealth ; 
agricultural  labor  is  therefore  the  only  productive  industry,  all 
others  being  sterile.  That  this  labor  produces  more  than  the 
farmer  and  his  household  consume,  is  the  origin  of  all  wealth, — 
which  is  merely  the  net-product  of  his  tillage.  The  values 
produced  by  all  other  labor  are  measured  by  the  cost  of  the  raw 
materials  and  of  the  workman's  food.  The  web  of  cotton  cloth 
is  but  so  much  raw  cotton  and  so  much  corn  turned  into  another 
form,  but  retaining  the  same  value.  The  utility  of  the  new  form  is 
greater;  the  amount  of  wealth  the  same.  From  this  he  inferred 
that  national  policy  should  do  nothing  to  develop  such  sterile 
industries  as  commerce  and  manufactures,  but  merely  remove  all 
restrictions  from  agriculture,  from  the  trade  in  grain,  &c.  As 
agriculture  alone  produces  wealth,  it  alone  must,  in  the  last 
resort,  bear  all  the  national  burdens,  however  these  may  be  im- 
posed. Turgot,  his  chief  disciple,  divests  the  theory  of  much 
that  is  fantastic,  and  in  his  policy  as  minister  of  finance  applied 
for  the  most  part  merely  its  just  rejection  of  the  system  of  mo- 
nopolies, close  corporations,  duties  on  exports,  &c. 

Quesnay's  first  book  {Tableau  Economique,  1758)  was  preceded  by  arti- 
cles (on  Fermiers  and  Grains)  in  the  famous  Encycloj)H%e  (1756-7).  The 
cider  Mirabeau,  "the  oldest  son  of  the  doctrine,"  wrote  much,  of  which 
L'Ami  det  Honimea  (6  vols.,  1765-60)  is  the  best  known.  His  greater  son 
furnished  the  theoretic  part  of  Mauvillon's  voluminous  statistical  work 
on  La  Monarchie  Pruasienue  (See  §  285).  Turgot's  chief  book  is  Reflexions 
iftr  la  Formation  et  la  DiHtribntion  dea  Richeaaea  (1766  and  1778).  Of  the 
many  other  writers,  none  add  either  to  the  substance  or  the  clearness 
of  the  doctrine.  Dr.  Franklin,  whose  visit  to  France  occurred  at  a  time 
when  these  opinions  were  in  fashion,  became  a  disciple  of  Quesnaj. 
§  9.  The  third  or  Industrial  school  of  economists  was  founded 
bjr  Adam  Smith,  a  Scotch  professor,  and  a  friend  of  Quesnay's. 


ADAM  smith's  "wealth  of  nations."  19 

His  great  work  (^A?i  Inquiry  into  tlie  Nature  and  Causes  of  the 
Wealth  of  Nations,  177G,  1778,  1784  and  1788)  occupied  him 
for  five  years.  It  shows  that  he  was  influenced  by  the  Phi/sio- 
crates,  yet  it  is  a  decided  advance  upon  their  teachings.  Ho 
finds  the  source  of  wealth  in  all  the  three  forms  of  industry,  but 
gives  the  first  place  in  point  of  productiveness  to  agriculture, 
the  last  to  foreign  commerce ;  while  he  classes  as  unproductive 
all  those  forms  of  human  activity  that  are  not  directed  to  the 
production  or  exchange  of  commodities.  Tracing  the  natural 
growth  of  the  three  great  industries,  through  whose  association 
men  advance  from  the  poverty  of  the  savage  life  to  material 
welfare,  he  pronounces  against  all  efforts  of  the  state  to  direct 
and  foster  any  one  of  the  three,  as  most  likely  to  turn  capital 
out  of  more  into  less  productive  channels.  He,  like  the  Econo- 
mutes,  would  have  the  State  adopt  ordinarily  a  purely  passive 
policy  as  regards  the  industrial  life  of  the  people.  By  leaving 
every  man  to  do  what  he  will  with  his  own,  and  to  use  it  in 
whatever  way  will  secure  the  largest  possible  returns  to  himself, 
society  will  receive  the  largest  possible  benefit.  In  the  principlg^ 
of  free  competition  he  discerns  the  tap-root  of  all  national  indus- 
trial life  and  growth;  the  enlightened  .and  active  selfishness  of 
the  individuals  who  make  up  society,  is  the  source  of  general 
well-being.  That  which  is  good  for  the  individual,  is  good  for 
society  also.  If  there  are  inequalities  of  profits  or  of  wages, 
capital  or  labor  will  shift  from  one  channel  to  another,  till 
things  find  their  natural  level. 

The  chief  fault  in  the  book  is  its  failure  to  fulfil  the  promise 
of  the  title.  Promising  to  discuss  "  the  wealth  of  Jiations,"  it 
practically  ignores  their  existence,  and  treats  the  whole  question 
Qs  if  there  were  no  such  bodies.  Smith  writes  as  if  the  world  were 
all  under  one  government,  with  no  boundary  lines  to  restrain 
the  movement  of  labor  and  capital, — no  inequalities  of  national 
civilization  and  industrial  status,  to  affect  the  competition  of 
producer  with  producer.  He  ignores,  therefore,  many  of  the 
most  important  elements  of  the  problem  that  ho  undertook  to 
solve.     Sharing  in  the  reaction  of  the  Physiocratists  .'igainst  the 


20  ELEMENTS   OF   POLITICAL   ECONOMY. 

excessively  political  drift  of  the  Mercantile  school,  he  also  goes 
to  the  other  extreme,  and  gives  us,  not  a  science  of  national  or 
poHtical  economy,  hut  of  cosmopolitical  economy,  which  is  not 
adapted  to  the  actual  historical  state  of  the  world,  but  only  to  a 
state  of  things  which  has  not,  nor  ever  will  have,  any  existence. 

This  way  of  thinking  was  the  popular  one  at  that  period  ;  Eu- 
rope was  in  a  state  of  reaction  against  the  nationalist  drift  of 
the  previous  centuries,  and  did  not  recover  from  it  until  the 
French  Revolution  had  carried  many  very  pretty  theories  to 
their  logical  consequences,  and  had  shown  what  they  were 
worth.  To  be  "  a  citizen  of  the  world''  was  the  ambition  of 
educated  men,  and  many  of  the  foremost  minds  of  Europe — 
Lessing  and  Goethe,  for  instance — formally  repudiated  the 
sentiment  of  patriotism  as  unworthy  of  an  enlightened  civili- 
zation. 

§  10.  In  spite  of  the  great  nationalist  reaction  that  began 
with  Burke  and  Fichte,  the  cosmopolitan  way  of  thinking  has 
not  yet  lost  its  attractions  for  men.  The  existence  of  the  cos- 
mopolitical school  of  economists  for  nearly  a  century,  and  the 
adhesion  given  to  it  by  a  majority  of  English,  and  a  great  num- 
ber of  Continental  and  American  writers,  are  a  proof  of  this. 

In  France  Jean  Baptiste  Say  reduced  the  teachings  of  Smith 
to  a  more  systematic  shape,  giving  them  that  clearness  of  expres- 
sion and  perfection  of  form  for  which  French  literature  is 
famous.  In  his  hands,  the  cosmopolitanism  of  the  system  is 
complete ;  his  very  first  title-page  dropped  the  awkward  words 
"  of  nations,"  and  from  this  time  the  abstract  conception  of 
wealth,  its  production,  distribution  and  consumption,  became 
the  themes  of  what  was  still  called  ^^ political  economy/'  He 
enlarged  the  conception  of  wealth,  however,  to  embrace  imma- 
terial as  well  as  material  products.  Since  the  passive  policy  was 
especially  assailed  as  leading  to  a  foreign  trade  in  which  the 
balance  may  bo  unfavorable,  he  devoted  especial  attention  to 
the  theory  of  conimeice.  He  was  the  first  to  announce  that 
commodities  arc  always  paid  for  in  commodities,  and  that  there- 
lure  to  check  the  amount  of  imports  is  to  limit  in  equal  measure 


MALTIIUS    "  ON   POPULATION."  21 

the  power  of  export.  Later  writers  of  the  same  nation  have, 
like  Say,  generally  spent  their  pains  in  the  elaboration  of  the 
English  theories,  without  adding  much  to  their  substance.  Not  a 
single  recognised  doctrine  of  the  cosniopolitical  economists  can 
be  traced  to  a  French  author  since  Say,  while  the  French  litera- 
ture, in  which  those  doctrines  are  defended  and  enforced,  is 
even  larger  than  the  English. 

Chevalier,  Rossi,  Blanqui  and  MoHnari  are  the  chief  French  rcpre- 
Bontatives  of  this  school.  Bastiat  belongs  to  it  in  his  general  tendencies, 
but  his  system  is  a  mixture  of  its  doctrines  with  those  of  Carey. 

In  England  Rev.  T.  R.  Malthus  furnished  a  discussion  of  the 
other  side  of  the  picture — the  poverty  of  nations  (^Essay  on 
Population,  1798,  1803,  1807,  1817  and  1826).  At  a  time  of 
great  political  disturbances,  when  the  impoverished  classes  of 
Europe  were  calling  the  governments  to  account  for  the  bad 
policy  or  no  policy  that  had  led  to  so  much  misery,  this  gentle- 
man, a  member  of  the  Conservative  party,  was  led  to  a  study  of 
the  economic  conditions  in  which  that  misery  originated,  that  ho 
might  close  the  mouths  of  agitators  by  showing  that  govern- 
ments had  nothing  to  do  with  it, — that  it  was  the  effect  of  a 
cause  beyond  the  control  of  the  ruling  classes.  He  found  that 
cause  in  the  excessive  growth  of  population,  which  led  to  the 
pressure  of  numbers  upon  subsistence,  and  could  only  be  per- 
manently controlled  by  the  self-restraint  of  the  lower  classes 
themselves.  This  discovery  was  a  godsend  to  the  cosmopolitical 
school,  as  it  enabled  it  to  tide  over  a  dangerous  period  of 
popular  agitation,  when  a  thousand  circumstances  seemed  to 
conspire  to  enforce  upon  economists  as  well  as  rulers  the  lesson 
that  governments  are  put  in  trust  with  the  national  welfare,  as 
well  as  the  national  honor  and  safety,  and  that  no  mere 
passivity  of  industrial  policy  could  be  a  sufficient  discharge  of 
the  trust. 

In  the  view  of  Mr.  Malthus,  the  condition  of  the  mass  of 
the  people  oscillates  between  ease  and  misery ;  as  soon  as  any 
sudden  advance  in  their  welfare  takes  place,  there  is  a  rapid 
increase  of  numbers  through  the  increase  of  recklessness  as  to 


22  ELEMENTS  OF   POLITICAL   ECONOMY. 

the  future,  and  then  years  of  scarcity  follow  hard  upon  the 
years  of  plenty.  It  was  an  easy  inference  that  there  is  a 
natural  rate  of  wages,  a  medium  between  these  two  oscillations, 
above  which  and  below  which  the  rate  was  unstable  and  could 
not  be  permanent.  Also  that,  calling  the  amount  of  capital  in 
the  country  that  was  available  for  the  wages  of  labor  the  wage- 
fund,  the  only  way  to  increase  the  rate  of  wages  was  to  increase 
that  fund  or  diminish  the  number  between  whom  it  was  to  be 
divided. 

Somewhat  later,  David  Ricardo  carried  the  investigation  of 
the  subject  a  step  farther,  desiring  to  show  the  first  cause  of 
the  inequality  of  condition  that  distinguishes  different  classes  of 
society.  Looking  through  Whig  spectacles,  as  Malthus  had 
looked  through  Tory  ones,  he  found  that  inequality  to  result  not 
from  the  operation  of  a  natural  and  unavoidable  cause,  but  from 
the  effects  of  an  artificial  monopoly,  the  tenure  of  land.  The  few 
who  have  been  lucky  enough  to  possess  themselves  of  the  best 
soils  at  the  first  settlement  of  a  country,  form  a  privileged  class 
that  can  live  in  idleness  upon  the  labor  of  others,  through  exact- 
ing payment  for  the  use  of  the  natural  powers  of  those  soils. 
This  theory — though  so  different  in  its  motive — was  accepted  by 
the  school  as  supplementary  to  that  of  Malthus.  Both — as  they 
came  to  be  taught — had  the  merit  of  showing  how  the  apparent 
anomalies  of  society  grew  out  of  circumstances  either  natural 
or  generally  accepted  as  natural;  in  the  last  analysis  the 
principle  of  competition  was  shown  to  be  the  tap-root  of  in- 
dustrial phenomena  in  both  cases ;  both  vindicated  the  passive 
policy  as  the  only  wise  one,  and  argued  all  national  interference 
to  be  a  fighting  against  invincible  facts. 

Mr.  Ricardo  (following  Say  and  Torrens)  also  elaborated  the 
theory  of  international  exchanges,  in  connection  with  the  notion 
that  money  is  a  purely  passive  instrument  of  exchanges,  changing 
its  purchasing  power  according  to  the  amount  cf  it  that  a 
country  pos-sosses.  From  this  it  was  an  easy  inference  that  a  drain 
of  money  from  a  country  would  either  have  no  effect,  or  would 
•orrect  itself  by  so  increasing  the  purchasing  power  of  money  ic 


RICARDO    AND    HIS    CRITICS.  28 

comparison  with  commodities,  as   to   make   the   country   a  bad 
place  to  sell  in,  but  a  good  place  to  buy  in. 

With  him  the  constructive  period  of  the  English  school  ends, 
and,  after  a  time  in  which  the  writers  are  chiefly  commentators 
on  the  traditional  body  of  doctrines,  a  critical  period  begins. 

Ricardo's  theory  of  rent  has  a  great  many  aspects,  according  to  the  side 
from  which  it  is  studied.  Did  he,  like  the  earliest  writers  who  followed  his 
lead,  accept  the  landlord's  monopoly  as  natural  and  inevitable,  or  look 
upon  it  as  a  mischief  that  society  would  be  well  rid  of?  His  dry  method 
of  discussion  makes  it  hard  to  say.  Later  writers  draw  from  the  theory 
the  inference  that  landed  property,  as  differing  from  all  other  property 
in  that  its  utility  is  not  the  product  of  labor,  is  especially  subject  to 
national  control.  This  is  probably  more  in  accord  with  Ricardo's  own 
motive,  as  may  be  inferred  from  his  hostility  to  the  legislation  by  which 
the  landowner  was  secured  against  foreign  competition  in  the  grain 
market.  His  Principles  of  Political  Economy  and  Taxation  (1817)  is  the 
last  piece  of  positive  work  of  the  school, — the  crowning  of  the  edifice. 
McCulloch,  James  Mill,  Chalmers,  De  Quincey,  and  many  others  are  his 
commentators ;  the  later  writers,  from  Senior  to  Thornton,  his  critics. 

§  11.  About  the  year  1833  English  thinking,  and  its  ex- 
pression English  literature,  took  a  new  departure,  becoming  less 
dry  and  mechanical,  more  fresh,  vigorous  and  genial.  Economic 
literature  shared  in  the  impulse.  N.  W.  Senior  led  off  (1835) 
with  a  vigorous  criticism  of  both  Malthus  and  Ricardo.  He 
especially  emphasized  the  fact  that  as  political  economy  con- 
sidered wealth  in  the  abstract,  and  excluded  all  political  con- 
siderations, it  had  no  right  to  intrude  into  the  political  sphere 
with  its  conclusions,  and  insist  on  statesmen  acting  in  accordance 
with  them.  At  the  utmost,  they  could  be  but  one  of  many 
considerations  that  should  influence  them.  The  divorce  of  the 
science  from  the  art  in  the  English  school — a  divorce  like  that 
which  once  existed  between  the  science  and  the  art  of  music — 
was  thus  candidly  confessed.  But  this  nice  distinction,  as  is 
commonly  the  case,  was  not  kept  in  view  by  most  writers  or  by 
the  statesmen  who  took  lessons  from  them. 

Thomas  Tooke  (^History  of  Prices^  6  vols.,  1838-58)  gave  a 
refutation  of  the  theory  that  money  plays  a  mere  passive  part 
in  industry,  prices  rising  in  proportion  to  its  increase,  and  falling 


24  ELEMENTS   OF   POLITICAL   ECONOMY. 

in  proportion  to  its  decrease.  He  thus  indirectly  brought  into 
question  the  theory  that  an  unfavorable  balance  of  trade  can  be 
of  no  injury  to  the  nation. 

W.  T.  Thornton  showed  that  the  theory  of  a  natural  and  ne- 
cessary rate  of  wages  was  not  borne  out  by  the  facts, — that  there 
is  no  uniformity  but  rather  the  most  arbitrary  difference  in  their 
rate, — that  capital  can  unnaturally  depress  it  below  what  is  right 
and  natural  when  the  workmen  stand  alone, — and  that  work- 
men in  combination  can  raise  and  have  raised  it.  Consequently 
the  theory  of  a  wage-fund,  changing  in  amount  with  the  growth 
of  capital,  and  divided  ^ro  rata  among  the  workmen  of  a  coun- 
try, is  a  fiction.  He  especially  exhibited  the  disastrous  effects 
of  English  theories  upon  English  agriculture,  in  separating 
the  mass  of  the  people  from  the  soil  and  breaking  up  the  small 
farms  to  make  large  ones. 

Herbert  Spencer  (partly  anticipated  by  N.  W.  Senior  and 
Poulett  Scrope,  and  followed  by  W.  R.  Greg)  refuted  the  Mal- 
thusian  theory  by  the  evidence  of  facts.  He  showed  that  there 
has  been  a  pressure  of  population  on  subsistence  in  the  earliest 
stages  of  society  and  those  only,  and  that  with  every  advance  in 
numbers  and  the  closeness  of  association,  the  pressure  naturally 
diminishes. 

German  and  English  students  of  the  history  of  land  tenure 
(i.  e.  Von  Maurer,  Nasse,  Maine  and  Laveleye)  showed  that 
Ricardo's  theory  of  the  origin  and  nature  of  rent  was  not  sustained 
by  history.  In  the  earliest  times  contracts  for  land  were  un- 
known, and  all  payments  were  determined  by  custom,  not  by 
competition.  They  showed  that  the  transition  from  customary 
status  to  free  contract  is  the  great  industrial  drift  of  progressive 
Bociety ;  but  that  the  transition  is  by  no  means  perfect,  and  that 
the  assumption  that  it  is,  whether  as  made  by  jurists  or  by 
economists,  has  been  a  fertile  source  of  wrong  to  the  poorer 
classes  of  society. 

John  Stuart  Mill,  besides  emphasizing  Senior's  separation  of 
the  science  from  the  art,  called  in  question  the  whole  system 
of  the  distribution  of  the  products  of  labor  and   capital,  as   an 


THE    CRITICAL   STAGE. — CAIIINES.— AMERICANS.        25 

artificial  and  perhaps  dispensable  one.  Accepting  the  thejriee 
of  iMalthus  and  Ricardo,  and  seeing  no  augury  of  a  better  future 
for  the  working  classes  from  the  present  workings  of  the  wages 
system,  he  declared  it  doomed,  unless  it  proved  capable  of  better 
things,  to  pass  away.  In  this  he  partly  followed  those  socialists, 
who  demand  a  reconstruction  of  society  and  the  extension  of  the 
sphere  of  government  so  as  to  embrace  the  direction  of  industry. 

More  moderate  men,  equally  convinced  of  the  failure  of  the  sys- 
tem of  competition,  contract  and  wages  under  the  existing  con- 
ditions, hope  for  a  change  through  the  voluntary  association  of 
masses  of  the  people,  so  that  they  may  become  their  own  em- 
ployers and  their  own  providers. 

All  these  writers  have  departed  from  the  spirit  and  the 
method,  as  well  as  the  teachings,  of  the  recognised  masters  of 
the  school.  They  have  reached  the  conclusions  embodied  in 
these  criticisms  by  an  inductive  study  of  the  actual  facts  of 
industrial  life,  instead  of  coming  at  them  by  a  series  of  deductive 
inferences  from  premises  assumed  at  the  outset.  Prof.  J.  E. 
Cairues  undertakes  to  vindicate  both  the  method  and  the  con- 
clusions (with  some  unavoidable  modifications  and  extensibns) 
of  the  older  authorities,  and  to  refute  the  unhappy  concessions 
of  these  later  writers. 

§  12.  In  America  the  cosmopolitical  school  has  had  many  adhe- 
rents, who  have  written  largely  in  defence  of  its  doctrines,  but 
none  of  them  are  of  any  importance  in  a  scientific  point  of  view. 
They  have  rendered  less  service,  even,  than  its  adherents  in 
France,  for  while  they  have  added  nothing  to  the  substance  of 
the  teaching,  they  have,  at  the  least,  not  surpassed  their  English 
masters  in  vigor  of  presentation  and  artistic  form. 

Deserving  of  mention  are  Oondy  Raguet,  Prof.  Thomas  Cooper  of 
South  Carolina,  W.  B.  Lawrence,  Dr.  Wayland,  the  poet  Bryant,  Prof.  A. 
Walker,  Prof.  A.  L.  Perry,  and  David  A.  Wells. 

§  13.  Within  tlie  present  generation  there  has  arisen  in  Europe 
and  America  a  school  whose  controlling  motive  seems  to  be  a  re- 
action against  the  excesses  of  the  English  or  cosmopolitical  school 
They  are  called  BometiTD^^^^t^^Qj^^^k^J^athedersocijlisfffij 


26  ELEMENTS   OF   POLITICAL   ECONOMY. 

and  sometimes  the  Historical  School.  To  this  last  title  they  have 
no  proper  right,  as,  while  they  reproduce  in  their  books  a  great 
number  of  historical  facts,  they  do  not  start  from  the  consider- 
ation of  national  life,  which  is  the  unit  of  history.  They  are 
cosmopolitan,  like  the  economists  they  criticise,  and,  in  the  ab- 
sence of  any  stable  principle  of  economic  science,  they  often 
carry  their  destructive  criticisms  of  the  older  doctrines  to  an 
unwarrantable  length,  assigning  to  law,  custom,  and  individual 
idiosyncrasy  a  reach  of  influence  which  leaves  no  room  for  any 
genuine  economic  science.  Yet  this  new  school  has  been  of  great 
service  in  its  criticisms  of  the  unscientific  methods  of  the  older 
economists,  and  in  disputing  their  claims  to  have  placed  their 
teachings  upon  a  truly  scientific  footing.  It  has  helped  to  recall 
men  from  the  world  of  theories  to  that  of  reality. 

The  best  known  representatives  of  this  school  are  Prof.  Roscher  in 
Germany,  Prof.  Laveleye  in  Belgium,  Profs.  Cliffe  Leslie  and  Ingram 
in  the  United  Kingdom,  and  Profs.  F.  A.  Walker,  Dunbar,  and  Bolles 
in  the  United  States.  It  has  representatives  among  the  economists  of 
every  European  country. 

§  14.  The  nationalist  school  of  economists  may  be  traced  to 
later  writers  and  statesmen  of  America  and  Germany.  Yet  we 
might  even  claim  Adam  Smith  himself  as  its  founder,  for  in  his 
happy  inconsistencies  he  gives  his  sanction  to  nearly  all  its  prin- 
ciples. A  still  earlier  writer,  the  great  Bishop  Berkeley  of  Cloyne 
(in  his  Querist^  1735  and  1752),  gives  suggestions  of  a  line  of  na- 
tional policy,  and  of  the  economic  reasons  for  it,  that  give  him 
a  clearer  as  well  as  a  prior  claim  to  the  honor.  The  form  of 
his  work,  a  series  of  nearly  600  leading  questions,  has  caused 
it  to  be  neglected ;  but  many  of  the  bishop's  notions,  especially 
as  to  the  nature  and  functions  of  money,  are  ahead  of  current 
ideas  in  our  age  as  well  as  his  own.  The  wretched  condition  of 
his  native  Ireland,  its  lack  of  money  and  of  manufactures, 
furnished  the  motive  to  these  investigations,  while  his  travels  on 
the  Continent  and  his  knowledge  of  England  furnished  him  with 
materials  for  comparison. 

Passing  by  statesmen   and  state-papers   (though  Alexander 


FICUTE.— COLEUIDQE.  27 

Hamilton  and  his  famous  Trcnsuri/  Rvport  of  1791  deserve 
mention),  we  find  an  early  literary  champion  of  the  Nationalist 
Bchool  in  the  great  philosopher  Fichte.  His  book  (/)er  geschlos- 
sene  Hamldsstaat^  1801),  however,  is  not  in  strictness  an 
economic  treatise,  but  as  its  title  page  tells  us,  an  appendix  to 
his  treatise  on  jurisprudence,  and  a  specimen  of  a  larger  treatise 
on  politics.  He  finds  the  wealth  of  the  nation  in  the  equilibrium 
of  the  three  great  industries,  and  regards  it  as  the  function  of 
the  government  to  produce  and  perpetuate  it  by  sufficient  legis- 
lation. Regarding  the  interchange  of  national  productions, 
save  of  those  that  cannot  be  produced  in  all  latitudes,  as  a  rem- 
nant of  the  barbarism  and  free  trade  that  reigned  in  Europe 
before  the  existing  nations  had  taken  shape,  he  would  at  once 
put  a  stop  to  it  by  substituting  paper  money,  current  only  within 
national  bounds,  for  the  gold  and  silver  that  pass  current  between 
the  nations.  As  to  cosmopolitanism  and  the  possibility  of  a 
world-state,  it  will  be  time  enough  to  talk  of  that,  when  we  have 
really  become  nations  and  peoples.  In  striving  to  be  everything 
and  at  home  everywhere,  we  become  nothing  and  are  at  home 
nowhere. 

Other  German  philosophers, — Franz  Baader  (as  early  as  1790),  J.  J. 
Wagner,  K.  C.  F.  Krause,  K.  A.  Eschenmayer ; — political  writers, — Adam 
Mliller,  Robert  von  Mohl ; — and  economists, — C.  A.  Struensee,  C.  F.  Ne- 
benius,  F.  B.  G.  Herrmann,  J.  G.  Busch, — with  many  others,  opposed 
the  passivity  theory  in  their  writings. 

Samuel  Taylor  Coleridge,  the  illustrious  English  poet,  critic 
and  philosopher  (in  his  Lay  sermon  on  the  existing  Distresses 
and  Discontents,  1817),  without  entering  into  details  or  proposing 
any  definite  economic  remedies,  deplored  the  over-balance  of 
the  trade  spirit  in  English  politics — theoretical  and  practical ; 
and  declared  his  belief  that  that  spirit  is  "  capable  of  being  at 
once  counteracted  and  enlightened  by  the  spirit  of  the  state,  to 
the  advantage  of  both."  He  called  in  question  the  maxims  re- 
ceived as  fundamental  by  the  school,  seeing  "  in  them  much 
that  needs  winnowing.  Thus  instead  of  the  position  that  all 
things  find,  it  would  be  less  equivocal  and  far  more  descriptive 
of  the  fact,  to  say  that  things  are  always  finding,  their  level; 


28  ELEMENTS   OF    POLITICAL    ECONOMY. 

which  might  be  taken  as  the  paraphrase  or  ironical  definition  of 
a  storm.  But  persons  are  not  things— but  man  does  not  find  hia 
level."  Quite  in  his  spirit,  his  chief  disciple  F.  D.  Maurice 
speaks  {National  Education,  1839)  of  "  the  mass  of  doctrines 
going  under  that  name"  of  political  economy,  "■  part  of  them  state- 
ments of  undoubted  facts;  part  of  them  useful  or  curious  ob- 
servations about  facts;  part  of  them  more  or  less  successful 
attempts  to  eliminate  laws  from  facts;  part  of  them  crude  and 
heartless  apophthegms  of  morality.  " 

§  15.  It  was  the  sufferings  inflicted  on  Germany  by  persist- 
ence in  the  policy  of  passivity  after  the  peace  of  1815,  that 
led  to  a  general  study  of  the  question,  and  in  Frederick  List 
the  German  people  found  one  who  could  state  and  explain  their 
needs  as  a  nation,  and  defend  a  more  national  policy  on  scientific 
grounds.  After  a  course  of  successful  agitation,  that  laid  the 
foundation  of  the  Zollverein,  he  came  to  the  United  States  in 
1825,  leaving  all  his  books  behind  him,  to  study  the  laws  of 
Bocial  growth  in  the  practical  examples  offered  by  the  new  world. 
As  the  country  was  then  making  rapid  advances  in  wealth,  under 
the  protection  of  a  nationalist  policy,  he  had  a  large  field  for 
study,  and  repaid  what  he  learnt  with  his  Outlines  of  American 
Political  Economy  (1827),  a  brief  pamphlet  that  contains  the 
germ  of  his  larger  work,  The  National  System  of  Political 
Economy,  (Das  Nationale  System  der  politisclien  (Economic^ 
1841  ;  English  transl.  1856),  which  he  prepared  after  his  final 
return  to  Germany  in  1832.  The  title  well  describes  the  book, 
and  List's  Hne  of  thought.  In  his  view  nations  are  industrial 
as  well  as  political  wholes,  characterized  by  an  internal  equality 
of  industrial  capacity,  and  destined  to  advance  in  wealth  and 
prosperity,  when  they  remove  all  obstacles  to  the  mutual  inter- 
change of  services  between  their  own  people.  If  all  nations 
stood  on  the  same  ground  of  equality  in  numbers,  capital  and 
industrial  development,  no  such  obstacle  would  be  presented  by 
the  freest  trade  with  all  other  nations  ;  but  in  the  actual  his- 
torical state,  a  few  possess  in  their  enormous  wealth  both  the 
power  and  the  will  to  bring  the  rest  into  a  state  of  industrial  subor- 


V 


LIST   AND    CAREY.  20 

dination  by  the  tyrannous  powor  of  capital.  If,  therefore,  a 
poorer  nation  wishes  to  have  free  trade  at  home,  she  cannot 
remain  passive  as  to  the  direction  of  the  national  industry. 

§  16.  Of  native  American  writers,  a  very  considerable  number 
defended  the  nationalist  theory  of  economy,  from  the  beginning 
of  our  union  into  one  people,  and  some  even  earlier.  Of  these 
Alexander  Hamilton,  Tench  Coxo,  Matthew  Carey  and  Charles 
J.  Ingersoll  deserve  mention.  But  their  aim  was  not  to  furnish  / 
a  scientific  basis  for  a  national  economy,  but  rather  to  urge  a  cer- 
tain economic  policy  from  reasons  of  direct  and  evident  utility. 

The  former  work  was  accomplished  by  Mr.  Henry  C.  Carey, 
in  whose  writings,  as  we  believe,  the  science  of  national  economy 
passes  out  of  the  mechanical  into  the  dynamical  stage,  i.  e.  be- 
comes a  true  science.  Instead  of  giving  us  a  mass  of  empirical 
rules  and  maxims  such  as  we  find  in  the  writings  of  the  mercan- 
tile school, — or  a  mass  of  fine-spun  speculations  that  stand  in  no^^- 
vital  relation  to  the  practice  and  life  of  nations,  as  is  done  by  the 
school  of  the  Economistes,  and  (in  a  less  degree)  by  that  of 
Adam  Smith, — he  presents  a  body  of  economic  teaching,  that 
rests  on  a  few  great  and  simple  principles  or  conceptions,  drawn 
by  actual  observation  from  life  itself,  yet  nowhere  incapable  of 
direct  application  to  any  practical  question.  These  principles 
arc  the  laws  that  govern  the  constitution  and  course  of  nature 
in  things  economical.  They  are  at  once  the  laws  of  human 
nature,  and  of  that  external  nature,  in  harmony  with  which 
man  was  created. 

Their  discovery  involves  a  searching  criticism  of  the  very  pre- 
mises of  the  so-called  Industrial  School,  and  of  those  conclu.sions 
that  fairly  earned  the  name  of  "  the  dismal  science."  For  it 
shows  that  these  natural  laws  are  laws  of  progress  towards  wealth 
and  the  equality  of  wealth.  Where  they  are  allowed  to  act  freely 
and  fully,  men  rise  from  poverty,  isolation  and  lawlessness,  to 
wealth,  association  and  national  order.  The  history  of  human 
economy  is  the  story  of  man's  transition  from  the  savage's  sub- 
jection to  nature,  to  the  citizen's  mastery  of  her  forces ;  and 
with  every  advance  the  greater  advantage  is  reaped  by  the  most 


30  ELEMENTS   OF   POLITICAL    ECONOMY. 

numerous  class,  that  is,  the  poorest.  It  thus  ''  vindicates  the 
ways  of  God  to  men,''  and  vindicates  also  the  existing  frame- 
work of  our  civilization  against  the  destructive  criticisms  of 
socialists  and  communists. 

And  wherever  the  wretchedness  of  the  savage  perpetuates 
itself  or  reappears  within  the  sphere  of  civilization,  there  is  to  be 
seen,  not  the  effects  of  natural  law,  but  of  its  violation.  There 
some  class — at  home  or  abroad, — through  some  vicious  legisla- 
tion or  defect  of  legislation,  has  interfered  for  selfish  ends  to 
hinder  the  natural  progress  toward  wealth,  equality  and  the 
harmony  of  interests  in  the  national  equilibrium  of  industries. 
To  remove  such  obstacles  is  the  sole  function  of  the  state,  as 
regards  the  active  direction  of  industry. 

Of  Mr.  Carey's  books  the  chief  are  Essay  on  the  Rate  of  Wages  (1835) ; 
The  Past,  the  Present,  and  the  Future  (1848) ;  The  Harmony  of  Interesta 
(1851);  The  Slave  Trade,  Domestic  and  Foreign  (1853);  Principles  of 
Social  Science  (3  vols.  1858) ;  and  The  Unity  of  Law  (1872).  Of  these 
and  others  of  his  works,  translations  of  one  or  more  have  appeared  in 
eight  of  the  principal  languages  of  Europe. 

Other  members  of  this  school :  in  America,  the  late  Stephen  Colwell 
(The  Ways  and  Means  of  Payment,  1859),  the  late  Hon,  Horace  Greeley 
(Essays  designed  to  elucidate  the  Science  [Art?]  of  Political  Economy, 
1870) ;  Hon.  E.  Peshine  Smith  {Principles  of  Political  Economy,  1853  and 
1872);  and  Dr.  William  Elder  {Questions  of  the  Day,  Economical  and 
Social,  1870).  In  France,  M.  Fontenay,  Benjamin  RampaJ  <ind  A.  Clapier 
{  De  I' Ecole  Anglaise  et  de  V Ecole  Amiricaine  en  Economic  Politique,  1871). 
Fred.  Bastiat  borrowed  some  of  Mr.  Carey's  ideas  {Harmouiea  Economiques, 
1850  and  1851)  to  fight  the  socialists,  and  made  a  curious  »nixture  of 
these  with  those  of  the  cosmopolitical  school.  In  Italy  the  statesman 
and  economist  Ferrara  gives  his  adherence  to  Mr.  Carey's  fi^st  princi- 
ples, and  censures  Bastiat  for  his  half  discipleship.  He  has  translated 
the  Principles  into  Italian.  In  Germany  Dr.  Diihring  of  the  University 
of  Berlin  {Carey's  Umw'dlzung  der  Volksicirthschaftslehre  und  Social- 
wiaseutchaft,  1865;  Capital  nnd  Arbeit,  neue  Antworten  auf  alte  F^agen, 
1865;  Die  Verkleinerer  Carey's,  nnd  die  Krisis  der  Nationalnhonomie, 
1867;  KritiHche  Geschichte  der  Nationalokonomie  und  Socialismus,  1871; 
Cnrsua  der  National-  und  Socialokonomie,  1873) ;  and  Schultze-Delitzsch, 
the  great  antagonist  of  socialism,  and  promoter  of  co-operation  {Cnpitel 
tH  einem  Deutsc.hen  Arbeiter-Katechismus,  1863;  Die  Abschaffnng  de* 
ysrhiifllichen  liisico  ditrch  Herrn  Lassalle;  einneues  Kapitcl  zum  Dcutscher, 
ArhtilHr-Kalcchismtis,  18(>G;  besides  many  smaller  works.       French  trans 


THE    CONTRAST    OF   Tllli    SCHOOLS.  31 

lation  of  those  two  by  Rainpal,  1873.)  In  England,  Judge  Bylc« 
(Sophisms  <>/  Free  Trade,  \st  edition  18i9j  9th  edition  1870;  Amurioan 
edition  1872.) 

§  17.  The  differences  that  exist  between  the  two  schools  is 
not  merely  in  regard  to  the  details ;  it  is  a  difference  about 
foundations  and  first  principles.  Neither  can  concede  to  the 
teaching  of  the  other  the  name  and  rank  of  a  science^  without 
giving  up  its  own  claim  to  that  name  and  rank. 

The  difference  is  one  of  method  also.  The  English  school  { 
adopt  the  deductive  method  of  the  mathematical  sciences,  and 
reason  down  from  assumed  first  principles  to  the  specific  facts. 
They  claim  that  the  necessary  data  for  this  are  already  at  hand, 
in  the  known  characteristics  and  tendencies  of  human  nature, 
the  avarice  and  the  desire  of  progress,  which  control  and  direct 
the  economic  conduct  of  great  masses  of  men.  They  leave  all 
other  elements  out  of  account  as  inconstant,  while  they  regard 
these  as  constant.  Theirs  is  therefore  "  a  science  based  upon 
assumptions "  (^Saturday  Review)  ;  it  "  necessarily  reasons 
from  assumptions,  and  not  from  facts  "  (J.  S.  Mill). 

The  American  and  German  school  apply  the  inductive  method 
of  observation  and  generalization,  which  has  produced  such  bril- 
liant results  in  the  natural  sciences.  They  begin  with  a  wide 
study  of  the  actual  working  of  economical  forces,  and  endeavor 
to  reason  upward  from  the  mass  of  complicated  facts  to  the 
general  laws  that  underlie  and  govern  all.  They  begin  by 
recognising  the  existence  of  an  actual  constitution  and  course  of 
nature,  instead  of  seeking  to  devise  an  artificial  one  on  assumed 
principles. 

These  differences  will  be  exemplified  in  the  following  chapters 


CHAPTER  SECOND. 
The  Development  of  Society.— The  Nation. 

§  18.  "  Man  is  a  political  animal,"  Aristotle  tells  us.  Hia 
nature  has  not  attained  its  perfection  until  he  is  associated  with 
his  fellows  in  an  organized  body  politic.  Whatever  may  be  the 
historical  occasion  of  the  origin  of  the  state,  this  fact  of  man's 
nature  is  the  sufficient  cause. 

The  first  type  of  society  is  the  family.  This,  like  the  state, 
is  a  natural  form.  It  is  a  relationship  not  constituted  by  a 
reflective  act  of  its  constituent  parts.  No  man  has  a  choice 
as  to  whether  he  will  or  will  not  be  born  into  a  family,  though 
he  may  by  his  own  act  cease  to  belong  to  it.  Like  the  state, 
the  family  has  a  moral  personality  and  a  distinct  life.  It  is  a 
whole  which  contains  more  than  is  contained  in  the  parts  as 
Buch ;  that  is,  it  is  an  organism,  not  an  accretion. 

§  19.  The  family  expanded  into  the  tribe.  Related  or  neigh- 
boring families  held  or  drawn  together  by  natural  affection  or 
neighborly  good  feeling,  or  a  sense  of  the  need  of  union  for  the 
common  defence,  but  chiefly  by  the  political  needs  and  instincts 
of  their  nature,  formed  an  organic  whole.  By  the  legal  fiction 
of  adoption,  all  were  regarded  as  members  of  one  family  and 
children  of  the  common  patriarch,  living  or  dead.  The  rever- 
ence for  the  common  father  whose  name  they  bore  became  a 
hero-worship,  and  bound  them  together  by  religious  ties.  Their 
living  head  or  chief  was  regarded  as  inspired  with  judgment 
to  pronounce  upon  disputed  cases,  which  gradually  gave  rise  to 
a  body  of  judicial  rules  or  laws  revered  as  of  divine  authority 

§  20.  The  tribe  became — though  not  always — a  city,  A 
hill-fort  thrown  up  for  defence  against  some  sudden  attack 
became  the  rallying-point  and  then  the  residence  of  its  people. 
The  conquest  or  adoption  of  other  tribes  added  to  their  numbers 
and  strength,  and  their  home  was  enclosed  by  a  wall  capable  of 
doFeiice.     The  tribal  gods  of  the  first  citizens  obtained  general 


THE   CITY   AND   THE   NATION.  33 

recognition  as  the  defenders  of  the  city,  but  those  of  the  new- 
comers were  still  worshipped  by  the  clans.  The  first  and  the 
adopted  tribes  took  the  place  of  power,  claiming  to  be  "the 
people,"  and  forming  an  aristocracy  who  possessed  exclusive 
knowledge. of  the  laws  and  religion  of  the  city.  Only  after  pro- 
longed struggle  were  these  published  in  a  code,  and  places  of 
responsibility  opened  to  the  new  citizens  or  plehs. 

§  21.  By  the  conquest  of  other  cities,  the  city  in  some  cases 
attained  an  imperial  rank.  In  other  cases  a  number  of  cities 
freely  united  in  a  league  of  offence  and  defence,  and  ceded  their 
power  to  make  war  to  a  central  congress,  and  established  a 
common  treasury.  Both  movements  are  in  the  direction  of  the 
nation,  the  complete  form  of  the  state,  as  the  tribe  and  the  city 
are  incomplete  forms.  The  nation  is  scarcely  found  in  ancient 
history,  save  perhaps  among  the  Jews  and  the  Egyptians,  and 
even  among  them  the  tribal  divisions  perpetuated  themselves 
within  the  national  unity. 

§  22.  The  nation  in  its  true  form  first  appears  in  the  king- 
doms founded  in  Western  Europe  by  the  Teutonic  tribes,  after 
the  destruction  of  the  Roman  Empire.  The  Teuton  hated 
cities  and  loved  the  open  country.  When  he  spared  a  city  he 
generally  left  it  to  its  old  occupants  and  made  them  his  tributa- 
ries. He  divided  the  open  country  into  marks  or  communes, 
whose  occupants  were  actually  or  by  adoption  members  of  one 
family-clan  and  bore  the  same  name.  Several  of  these  were 
gathered  by  force  of  the  political  instinct  into  "hundreds," 
hundreds  into  "  shires,"  and  shires  into  kingdoms.  Over  each 
of  these  subdivisions  an  elder,  alderman  or  chief  presided.  In 
this  way  the  race  passed  from  the  tribal  to  the  national  consti- 
tution, without  developing  the  vigorous  municipal  life  that  had 
previously  thwarted  all  attempts  at  establishing  any  larger  body 
politic  than  the  city,  except  a  military,  imperial  despotism. 

Within  the  Teutonic  mark  towns  grew  up  by  the  same  pro- 
cess as  in  the  ancient  world,  and  the  antipathy  of  the  race  to 
the   town   life   wore  off.     But  before   these  new  municipalities 
were  powerful  enough  to  hinder  the  national  growth,  the  nation 
3 


34  ELEMENTS   OF   POLITICAL    ECONOMY. 

had  become  an  established  fact.  A  second  enemy  of  the 
national  -mity  was  the  feudal  system,  which  conferred  large 
powers  upon  the  local  barons,  in  countries  that  had  been  con- 
quered rather  than  occupied.  Everywhere  save  in  Germany 
itself  the  joint  ciforts  of  the  king  and  the  people  overthrew  this 
local  power,  and  made  the  central  government  supreme.  Thus 
the  national  consciousness  superseded  all  other  political  attach- 
ments. 

§  23.  The  nation  is  the  normal  type  of  the  modern  state,  as 
the  city  was  that  of  ancient  society,  and  the  tribe  that  of  the 
prehistoric  times.  Besides  many  inaccurate  definitions  of  its 
nature,  several  that  deserve  our  notice  have  been  given  from 
diflFerent  stand-points. 

(1)  Geographically  the  nation  is  a  people  speaking  one  lan- 
guage, living  under  one  government,  and  occupying  a  continuous 
area.  This  area  is  a  district  whose  natural  boundaries  designate 
it  as  intended  for  the  site  of  an  independent  people. 

No  one  point  of  this  definition  is  essential,  save  the  second. 

(2)  Politically  the  nation  is  an  organization  of  the  whole 
people  for  the  purposes  of  mutual  defence  from  outside  inter- 
ference and  of  doing  justice  among  themselves.  It  is  a  people 
who  "  will  to  be  one  "  in  a  body  politic,  for  the  purpose  of  re- 
alizing and  making  positive  those  natural  rights  which  inhere  in 
man's  nature. 

(3)  Ethically  the  nation  is  a  moral  personality  vested  with 
responsibility  and  authority,  and  endowed  with  a  life  peculiar  to 
itself,  i.  e.,  not  possessed  by  the  parts  as  individuals. 

§  24.  All  these  notions,  and  others  besides,  are  elements  of 
the  historical  conception  of  the  nation.  The  historical  nation  ig 
an  organism,  a  political  body  animated  by  a  life  of  its  own.  It 
embraces  not  one  generation  but  many,  the  dead  and  the  unborn 
as  well  as  the  living.  It  contemplates  its  own  perpetuity,  making 
self-preservation  the  first  law,  and  being  incapable  of  providing 
for  its  own  death  or  dissolution.  There  is  in  its  own  nature  no 
rea.son  why  it  should  ever  cease  to  exist,  and  the  analogies  often 
drawn  from  the  life  and  death  of  the  individual  man  are  falla- 
cious.    The  end  of  the  nation  is  its  own  perfection  ;  towards 


THE   DIVINE   ORIGIN   OF   THE   STATE.  3A 

that  it  tends  by  a  continual  progress  to  a  larger  and  freer  life. 
Thus .  in  its  laws  it  continually  aims  to  make  political  rights 
more  and  more  the  realization  of  natural  right.  In  its  gradual 
or  sudden  modifications  of  the  form  of  government,  it  tends  to 
make  it  more  and  more  the  exponent  of  the  wants  and  the 
powers  of  the  governed.  Industrially  it  continually  aims  to 
develop  the  resources  of  its  soil  and  the  activities  of  its  people, 
until  they  become  in  all  necessary  things  independent  and  self- 
sufficient. 

§  25.  The  nation  as  a  moral  personality  must  have  had  the  same 
ultimate  origin  as  other  moral  personalities,  whether  we  conceive 
of  it  as  the  direct  creation  of  God  or  as  the  work  of  His  crea- 
tures. The  traditions  of  all  ancient  cities  with  which  we  are 
acquainted,  point  to  the  first  of  these  alternatives,  that  is,  to  a 
divine  origin  of  their  unity  and  their  laws;  and  no  one  who  be- 
lieves in  the  continual  government  of  the  world  by  the  Divine 
Will  can  doubt  that  nations  exist  in  consequence  of  that  will. 
*'  He  setteth  the  solitary  in  families.  .  .  .  He  fixeth  the  bounds 
of  the  nations."  Then  national  laws  are  authoritative  because 
they  set  forth  that  Will,  though  its  agency  be  concealed  by  reason 
of  its  working  through  and  by  the  will  of  man.  Hence  the 
right  of  the  nation  over  the  lives  and  persons,  as  well  as  the  pos- 
sessions, of  its  members.  It  has  a  delegated  authority  from  the 
Giver  of  life. 

§  26.  The  state  is  either  the  creature  of  God,  with  authority 
limited  because  delegated,  or  is  an  uncreated  entity  with  au- 
thority unlimited  because  original.  In  the  latter  case  it  can 
confess  none  of  its  acts  to  be  wrongful,  since  it  owns  no  law  or 
morality  above  or  beyond  its  own  will.  It  must  punish  all  appeals 
to  "  the  higher  law  "  as  treasonable.  The  atheistic  theory  of  the 
state  thus  necessarily  leads  to  the  despot's  construction  of  its 
powers.  Those  who  hold  it  have  generally  been  in  modern  times, 
by  a  happy  inconsistency,  on  the  liberal  side  in  politics,  but 
when  they  attain  to  power,  the  logic  of  their  position  must  lead 
them  on  to  despotic  measures.  The  only  lasting  and  inviolnble 
guarantee  of  personal  freedom  is  in  the  doctrine  of  the  state's 
divine  origin  and  authority,  though  even  this  doctrine  may  bo 


36  ELEMENTS   OF   POLITICAL   ECONOMY. 

abused  to  serve  the  purpose  of  despots,  when  tlio  state  is  con. 
ceived  as  constructed  ah  extra  by  the  imposition  of  a  govern- 
ment by  a  divine  authority  from  without.  But  the  doctrine 
of  the  Old  Testament  is  that  the  state  is  constituted  through 
the  people  themselves  being  drawn  into  national  unity,  and  that 
the  government  is  the  result  and  exponent  of  this  fact.  The 
governor,  as  the  word  originally  signified,  is  the  steersman  of 
the  vessel,  giving  direction  to  its  course.  But  it  is  not  his 
function  to  furnish  the  moving  force  of  the  ship  of  state.  That 
is  furnished  by  the  vital  force  of  the  whole  body  politic. 

§  27.  As  God  made  the  state,  he  had  a  purpose  in  making 
it,  a  purpose  which  includes  some  elements  common  to  all  states 
and  others  that  are  peculiar  to  the  particular  state.  Each  state, 
like  each  man,  has  a  calling,  a  vocation.  Every  nation  is  an 
elect  or  chosen  people.  It  has  a  peculiar  part  to  play  in  the 
moral  order  of  the  world.  When  it  recognises  this  purpose,  it 
is,  in  Hebrew  phrase,  a  people  in  covenant  with  God.  The 
leading  purpose  of  the  Old  Testament  is  to  set  forth  the  manner 
of  such  a  national  life,  and  the  moral  laws  that  govern  it.  It 
gives  the  essential  features  of  such  a  life,  in  connection  with 
some  that  are  peculiar  to  the  Jewish  nation. 

§  28.  The  universal  element  in  the  vocation  of  a  state  is  ex- 
pressed in  the  statement  that  it  is  the  institution  of  rights. 
This  differentiates  it  from  the  family,  which  is  the  institution  af 
the  affections;  also  from  mankind  at  large,  as  rights  are  realized 
and  made  positive  through  the  existence  of  the  state.  Justice 
or  Righteousness,  Plato  discovered,  is  of  the  essence  of  the 
state.  It  can  therefore  attain  to  the  purpose  of  its  vocation 
only  by  complying  with  the  ideal  of  justice  as  apprehended  by 
the  national  conscience, — an  ideal  ever  advancing  in  clearness 
and  completeness  as  the  nation  tries  to  realize  it.  At  the  first 
this  ideal  requires  only  the  righteous  treatment  of  its  own 
citizens  as  alone  invested  with  the  rights  it  recognises.  After- 
wards men  are  brought  by  analogy  to  feel  that  as  the  state 
judges  between  man  and  man,  God  is  judging  between  nation 
%nd  nation.    Hence  originates  a  body  of  law  between  the  nations, 


THE   END   AND   THE   PROGRESS   OF    THE   STATE.         37 

If  justice  be  of  the  essence  of  the  state,  any  wilful  and  con- 
scious violation  of  it,  i.  e.,  any  national  unrighteousness  that 
does  not  spring  from  and  find  its  palliation  in  a  low  ideal  of 
righteousness,  must  be  a  blow  at  the  national  life  and  existence. 
It  must  weaken  the  bonds  which  bind  men  to  one  another. 
Hence  to  plead  the  necessity  of  the  national  life  as  the  excuse 
for  such  acts,  is  to  plead  that  the  state  can  only  be  saved  by 
being  destroyed.  A  state  that  has  ceased  to  aim  at  righteous- 
ness has  given  up  its  raison  d'etre,  and  is  a  practical  contra- 
diction. It  has  ceased  to  be  a  body  politic,  and  has  become  a 
band  of  pirates. 

§  29.  Justice  has  two  aspects.  (1)  It  is  the  state's  function 
to  do  justice  upon  evil-doers  within  (and  sometimes  without)  its 
own  boundaries,  by  punishing  them  for  past  and  deterring 
them  from  future  invasions  of  the  rights  of  others.  (2)  It  is 
also  called  upon  to  do  itself  justice;  that  is,  to  secure  the 
fullest  and  freest  development  of  the  national  life  in  all  worthy 
directions.  As  self-preservation  is  its  first  duty,  there  is  in- 
volved in  that  duty  this  obligation — to  progress  in  national  life. 
'*  The  end  of  the  state  is  not  only  to  live,  but  to  live  nobly." 

§  30.  In  the  order  of  nature,  progress  is  attained  through  \ 
the  differentiation  of  the  parts  of  a  living  organism  from  each 
other  and  from  the  whole.  "  The  higher  a  living  being  stands 
in  the  order  of  nature,  the  greater  the  difference  between  its 
parts,  and  between  each  part  and  the  whole  organism.  The 
lower  the  organism,  the  less  the  difference  between  the  parts, 
and  between  each  part  and  the  whole"  (Goethe). 

"  The  investigations  of  Wolff,  Goethe,  and  Von  Baer,  have 
established  the  truth  that  the  series  of  changes  gone  through 
during  the  development  of  a  seed  into  a  tree,  or  an  ovum  into 
an  animal,  constitute  an  advance  from  homogeneity  of  structure 
to  heterogeneity  of  structure.  .  .  .  The  first  step  is  the  ap- 
pearance of  a  difference  between  two  parts  of  its  substance.  .  .  . 
This  law  of  organic  progress  is  the  law  of  all  progress. 
"Whether  it  be  in  the  development  of  the  earth,  in  the  develop- 
ment of  life  upon  its  surface,  in  the  development  of  Society,  of 


38  ELEMENTS   OF   POLITICAL  ECONOMY. 

Government,  of  Manufactures,  of  Commerce,  of  Language, 
Literature,  Science,  Art — this  same  evolution  of  the  single  into 
the  complex,  through  successive  diflFerentiations,  holds  through- 
out. From  the  earliest  traceable  cosmical  changes  down  to  the 
latest  results  of  civilization  [it]  is  that  in  which  progress 
essentially  consists.  ...  As  we  see  in  existing  barbarous  tribes, 
society  in  its  first  and  lowest  forms  is  a  homogeneous  aggrega- 
tion of  individuals  having  like  powers  and  like  functions,  the 
only  marked  difi^erence  of  functions  being  that  which  ac- 
companies difference  of  sex.  Every  man  is  warrior,  hunter, 
fisherman,  tool-maker,  builder;  every  woman  performs  the  same 
drudgeries ;  every  family  is  self-sufficing,  and,  save  for  purposes 
of  aggression  and  defence,  might  as  well  live  apart  from  the 
rest"  (Herbert  Spencer). 

See  also  Coleridge's  Idea  of  Life.  (Works,  Vol.  I.,  esp.  p.  388.) 
This  is  true  less  of  the  spiritual  than  of  the  material  side  of 
the  national  life.  It  applies  especially  to  those  relations  to 
nature,  which  are  the  theme  of  social  science  in  the  sense  that 
we  take  it, — relations  which  come  very  directly  under  the  action 
and  control  of  natural  laws  (See  §  2).  As  regards  the  higher 
or  spiritual  side  of  that  life,  each  member  of  the  perfect  state  is 
in  some  sense  a  reproduction  of  the  whole  body  politic,— like  it 
a  free  moral  personality. 

Yet  the  Apostle  Paul  applies  this  analogy  of  difference  and  interde- 
pendence to  the  most  purely  spiritual  form  of  society.  "  The  body  is  not 
one  member  but  many,  and  all  members  have  not  the  same  office.  .  .  . 
The  eye  cannot  say  to  the  hand,  I  have  no  need  of  thee." 

§  31.  Every  fully  developed  state  is  a  complex  form  of  life, 
whose  elements  may  be  distinguished  as  three.  There  is  the 
industrial  state,  the  jural  state,  and  the  culture-state.  The 
second  embraces  the  state's  political  life,  the  people's  advance  in 
freedom  and  social  morality,  and  its  development  in  legislation  ; 
the  third  is  the  sphere  of  intellectual  movement,  progress  in  the 
fine  arts,  in  literature  and  the  sciences.  The  first  is  the  sphere 
of  the  material  well-being  of  the  people.     The  full  development 


THE    RIGHT    AND    THE    LIMITS    OF    PATRIOTISM.         39 

of  each  of  the  three  is  essential  to  the  highest  well-being  of  tho 
whole  body  politic. 

§  32.  In  seeking  the  full  and  free  development  of  the  national 
life  on  all  its  sides  as  its  chief  end,  the  state  cannot  be  charged 
with  selfishness.  The  affections  and  the  attachments  of  finite 
beings  are  of  necessity  circumscribed,  that  they  may  be  intense, 
vigorous  and  healthy.  In  the  family  life  we  should  count  the 
man  immoral  who  loved  other  men's  wives  as  he  loved  his  own ; 
unnatural  if  he  had  no  more  affection  for  his  own  children  than 
for  those  of  other  men.  To  "  provide  for  his  own,  especially 
for  them  that  are  of  his  own  house,"  is  one  of  the  first  duties 
of  the  head  or  the  member  of  a  nation  as  well  as  of  a  house- 
hold. 

While  acting  first  of  all  for  the  interest  of  his  own  nation,  he 
is  not  bound  to  seek  to  injure  or  cramp  the  natural  develop- 
ment of  other  nations.  He  can  quite  consistently  cherish  the 
warmest  desires  for  the  welfare  of  every  other  national  house- 
hold, and  scrupulously  avoid  any  act  that  would  interfere 
with  it.  The  more  strong  and  hearty  and  pure  the  attachment 
he  feels  towards  his  own  nation,  the  more  likely  he  is  to  sympa- 
thize with  the  patriotic  citizens  of  other  nations.  The  late  F.  D. 
Maurice  well  says  :  "  If  I  being  an  Englishman  desire  to  be 
thoroughly  an  Englishman,  I  must  respect  every  Frenchniun 
who  desires  to  be  thoroughly  a  Frenchman,  every  German  who 
strives  to  be  thoroughly  a  German.  I  must  learn  more  of  the 
grandeur  and  worth  of  his  position,  the  more  I  estimate  tho 
worth  and  grandeur  of  my  own.  .  .  Parting  with  our  dis- 
tinctive characteristics,  we  become  useless  to  each  other, — we 
run  in  each  other's  way;  neither  brings  in  his  quota  to  the 
common  treasure  of  humanity." 

Those  who  cherish  the  enthusiasm  that  men  feel  for  their  own  nation, 
as  ethically  right,  do  not  necessarily  repudiate  "  the  enthusiasm  of 
humanity."  They  may  very  well  recognise  its  value  And  dignity,  while 
feeling  that  it  belongs  to  another  sphere  than  either  the  jural  or  indus- 
trial state.  There  is  another  kingdom,  "  not  of  this  world  "  or  order,  in 
which  "there  is  neither  Jew  nor  Greek,"  founded  by  hira  who  awakened 
the  sense  of  human  brotherhood  in  the  hearts  of  men. 


40  ELEMENTS    OF    POLITICAL   ECONOMY. 

§  33.  The  industrial  state  contains  three  great  fundamental 
classes, — the  agricultural,  the  commercial  and  the  manufactur- 
ing. A  nation  takes  high  rank  industrially  in  proportion  as 
all  the  three  are  fully  developed  and  exist  in  equilibrium.  If 
any  one  of  the  three  is  depressed  or  hindered  in  its  develop- 
ment, the  whole  body  politic  suffers  accordingly.  The  others 
may  seem  to  prosper  at  its  expense,  but  because  the  state  is  a 
living  organism  and  not  a  dead  aggregate  of  individuals,  one 
member  cannot  suflfer,  but  all  the  members  must  suffer  with  it. 

§  34.  The  individuality  of  the  parts  of  an  organism  has  its 
end  in  their  interdependence  and  mutual  helpfulness.  A  flock 
of  animals,  though  "a  collection  of  individuals,"  is  not  a  whole 
made  up  of  differentiated  parts.  It  is  only  "a  numerical  ex- 
tension of  a  single  specimen."  A  mob  of  men  is  equally 
deficient  in  true  organic  unity.  It  is  united  only  by  the  exist- 
ence of  the  same  overmastering  rage  or  lawlessness  in  each 
single  individual,  as  animates  the  entire  mob.  A  state  is  a  body 
in  which  men  have  different  functions  as  well  as  different  per- 
sonalities ;  in  which  each  has  his  place  of  service  to  the  whole 
body.  The  greater  and  more  marked  the  variety  of  the  parts, | 
the  more  closely  the  whole  body  is  bound  in  an  effective  unity. 
The  nation  takes  a  low  rank  industrially  whose  members  are  not 
employed  chiefly  in  serving  one  another,  but  in  serving  the 
members  of  other  nationalities. 

§  35.  All  history  illustrates  the  principle  that  the  chief 
growth  of  the  state  is  from  within.  Nations  have  often  imparted 
to  each  other  wholesome  and  stimulating  impulses,  but  beyond 
a  certain  limit  foreign  influence  has  always  been  a  hindrance, 
and  has  been  jealously  resented  by  the  wise  instincts  of  the  peo- 
ple. We  see  this  in  the  history  of  art,  literature,  language,  law 
and  political  institutions,  and  every  other  side  of  the  national  life. 

Any  plan  of  human  life,  any  project  for  human  improvement, 
which,  either  in  the  interest  of  imperial  ambition  or  of  cosmo- 
politan philanthropy,  ignores  the  existence  of  the  nations  as  parts 
of  the  world's  providential  order,  can  work  only  mischief  and 
confusion. 


CHAPTER  THIRD. 
Wealth  and  Nature. 

§  36.  AV^E  are  engaged  in  "an  inquiry  into  the  nature  and 
causes  of  the  wealth  of  nations."  The  word  wealth  is  used  in 
two  senses ;  as  meaning  either  the  aggregate  of  possessions  that 
minister  to  man's  necessities  and  tastes,  or  the  possession  of  an 
abundance  of  such  objects.  .  In  the  former  or  popular  sense 
wealth  is  the  measure  of  man's  power  over  nature ;  in  the  latter 
or  scientific  sense  it  is  the  power  itself  developed  to  more  than 
the  average  degree. 

Closely  connected  with  the  term  wealth  is  the  term  value. 
The  one  is  the  antithesis  of  the  other.  If  wealth  is  the  mea- 
sure of  man's  power  over  nature,  value  is  the  measure  of 
nature's  power  over  man, — of  the  resistance  that  she  ofi"ers  to 
his  eflforts  to  master  her.  Some  of  the  natural  substances  are  to 
be  had  everywhere,  always  and  in  the  form  needed  for  man's 
consumption.  These  have  no  value,  though  the  very  highest 
utility.  Others,  such  as  the  water  for  the  supply  of  a  great 
city,  need  to  be  changed  in  place,  and  have  a  value  proportional 
to  the  cost  of  their  transfer.  Others  need  to  be  changed  in  form 
by  nianufiicture  as  well  as  changed  in  place  before  their  use,  and 
have  a  still  higher  value.  In  other  instances  the  resistance 
takes  the  form  of  scarcity,  and  is  therefore  in  some  degree  in- 
superable, and  the  degree  of  the  value  is  still  higher. 

§  37.  Man  stands  in  close  relation  to  nature,  as  the  possessor 
of  a  body  which  forms  part  of  the  physical  world.  He  there- 
fore needs  the  services  of  nature  continually.  His  body  is  un- 
dergoing incessant  decays  and  renewals.  Motion,  respiration, 
sensation,  digestion,  circulation  of  the  blood,  even  thought  itself 
wear  away  its  tissues,  and  unless  this  waste  be  replaced  the  man 
must  die  literally  of  exhaustion. 

Furthermore,  these  vital  processes  can  be  carried  on  only  in 
the  presence  of  a  certain  amount  of  animal  heat,  which  must  be 

41 


42  ELEMENTS  OP   POLITICAL   ECONOMY. 

supplied   from  within,  and   (in   most  climates)   shielded   from 
without  to  prevent  its  excessive  radiation. 

The  chemical  substances  that  form  the  bodily  frame  are  chiefly  Oxygen, 
Hydrogen,  Carbon  and  Nitrogen.  The  two  first  in  the  form  of  water 
make  lb  per  cent,  of  the  whole  body,  and  83  per  cent,  of  the  most  com- 
mon foods.  Berzelius  says  that  the  living  organism  is  to  be  regarded  as 
a  mass  diffused  in  water,  and  another  chemist  has  humorously  defined  man 
as  fifty  pounds  of  nitrogen  and  carbon  suspended  in  six  buckets-full  of 
water. 

The  starch  which  forms  so  large  an  element  in  the  ordinary  foods 
enters  into  the  composition  of  none  of  the  tissues.  It  is  consumed  in  the 
lungs  to  furnish  the  vital  heat,  and  breathed  off  as  carbonic  acid. 

§  38.  Hence  man's  two  great  material  necessities  are  food 
and  clothing.  The  desires  for  these  furnish  the  motive  to  the 
vastest  activities  of  the  race.  As  his  brain  expands,  indeed, 
and  as  society  develops,  other  desires  grow  into  life  and  become 
motives  to  action ;  but  these  two  are  universal.  Others  are 
voluntary  ;  these  are  enforced  by  the  sensations  of  hunger  md 
cold.  Others  are  directed  to  comforts  or  luxuries;  these  to 
things  necessary  and  indispensable. 

The  productions  of  the  three  kingdoms  of  nature  do  not 
equally  satisfy  these  desires.  Though  there  are  apparent  ex- 
ceptions, it  njay  be  laid  down  as  a  rule  that  he  obtains  food  and 
clothing  from  the  animal  and  vegetable  kingdoms  only.  The 
anirfial  kingdom  as  a  whole  is  supported  by  the  vegetable,  which 
in  its  turn  depends  upon  the  abundance  and  fitness  of  the  great 
mixtures  of  vegetable  and  mineral  substances  which  we  call 
soil.  Only  the  lowest  type  of  vegetation  can  support  its  life 
upon  mineral  food  alone. 

§  39.  We  can  trace  the  story  of  the  earth's  development  back 
to  a  period  when  vegetation,  and  therefore  soil,  did  not  yet  exist 
upon  its  surface.  Some  of  the  natural  agents  already  at  work 
were  indeed  preparing  for  the  formation  of  soil.  Glacial  corro- 
sion and  other  violent  forms  of  action  were  grinding  masses  of 
rock  into  fine  sand,  and  the  frosts  were  chipping  away  the  edges 
and  faces  of  the  rocks  by  sudden  expansion  of  the  water  that 
they  had  absorbed. 

Vegetation  began  with  the  lichens  and  the  mosses,  which 


THE   HISTORY   OF   THE   SOIL.  43 

secured  a  foothold  on  the  surface  of  the  rocks,  and  slowly  crum- 
bled down  a  few  grains  of  sand  from  the  hard  mass  (by  the 
action  of  the  oxalic  acid  which  they  secrete),  and  dying,  mingled 
therewith  the  ashes  of  their  own  decay.  This  furnished  the 
first  soil  for  the  next  highest  order  of  vegetable  life,  and  thus 
through  successive  orders  of  vegetable  life  the  soil  was  deepened 
and  enriched. 

As  illustrating  Goethe's  law  of  progress  by  differentiation  of  the  parts 
from  the  whole  and  from  each  other  (see  ^  30),  it  is  worth  while  to  notice 
the  stages  of  this  development  as  given  in  the  great  classification  of 
Oken.  First  come  tho  acotyledons  (lichens,  mosses,  Ac),  which  have 
neither  root  nor  stem,  neither  bark  nor  wood,  neither  leaves  nor  seeds. 
Then  tho  monocotyledoua  (grasses,  lilies  and  palms),  which  have  no 
branches  nor  true  leaves,  but  may  have  either  woody  stems,  or  venous 
liher,  or  bark — never  the  three  united.  The  third  are  the  dicutyledona 
(fruit  and  forest  trees,  <fcc.),  which  unite  all  these  parts  in  one  organism. 

This  process  of  the  formation  of  soil  on  a  rocky  surface  by 
successive  vegetable  growths,  still  takes  place  with  some  modifi- 
cations in  the  coral  islands  of  the  Pacific.  When  the  coral 
polyp  has  raised  its  rocky  fortress  above  the  sea  level,  the 
surface  is  soon  strewed  with  fragments  that  the  waves  break  off 
and  grind  into  sand,  which  is  mixed  with  the  remains  of  the 
coral  polyp.  A  cocoanut  carried  safely  in  its  rough  husk  on  a 
long  voyage  is  washed  ashore  and  takes  root.  The  decay  of  its 
leaves  forms  a  new  soil,  and  the  birds  that  rest  on  its  branches 
bring  the  seeds  of  other  vegetation  in  their  crops,  so  that  a 
multifarious  growth  rapidly  covers  the  barren  rock. 

§  40.  The  sustenance  which  the  growing  plant  derives  from 
the  mineral  kingdom  is  not  taken  solely  nor  even  mainly  from 
the  soil  through  its  roots,  but  from  the  air  through  its  leaves. 
Were  it  otherwise,  the  growth  of  the  soil  must  stop  as  soon  as  its 
depth  became  as  great  as  that  to  which  the  plants  thrust  down 
their  roots.  But  six  feet  of  soil  is  not  uncommonly  found  on  tho 
prairies  of  the  West,  and  even  that  depth  still  increasing.  The 
chief  food  of  plants  is  carbonic  acid,  one  of  the  elements  of  the 
air,  which  in  the  early  geological  ages  was  so  abundant  that  only 
vegetable  life  couli  have  existed  jon  the  earth's  surface.     Tho 


44  ELEMENTS   OF   POLITICAL   ECONOMY. 

first  luxuriant  vegetable  growths,  the  mosses  and  the  ferns 
absorbed  it  in  vast  quantities,  growing  with  marvellous  rapidity^ 
and  forming  the  deposits  of  decayed  vegetation,  now  known  to 
us  as  coal,  after  having  been  subjected  to  vast  pressure  for 
unnumbered  ages.  By  burning  this  as  fuel  we  give  back  to  the 
atmosphere  a  small  part  of  the  carbonic  acid  that  once  saturated 
it,  and  thus  furnish  food  for  new  vegetation  from  the  substance 
of  those  which  flourished  ages  ago.  Nothing  that  is  consumed 
or  that  decays  upon  the  earth's  surface  is  wasted  ; — nothing  is 
wasted  but  what  goes  into  the  sea.  "  Atmospheric  air  is  the 
grand  receptacle  from  which  all  things  spring  and  to  which  they 
will  return.  It  is  the  cradle  of  vegetable  and  the  coffin  of 
animal  life"  (Dr.  Jno.  W.  Draper). 

Carbonic  acid  forms  but  a  thousandth  part  of  the  chemical  mixture 
that  we  call  air. 

§  41.  The  foliage  of  the  plant  is  a. vegetable  substitute  for 
mouth  and  lungs.  It  presents  a  vast  absorptive  surface  to  the 
air  through  which  it  drinks  in  carbonic  acid  and  transmutes  it 
into  woody  fibre.  To  pluck  all  the  leaves  of  a  tree  in  the  early 
summer  would  be  to  kill  it  by  suffocation  and  starvation.  From 
the  vast  storehouse  of  the  air  the  plant  draws  its  food,  and  the 
atmospheric  supply  is  kept  up  by  the  decay  of  other  plants,  by 
the  respiration  of  animals,  and  by  the  consumption  of  wood  and 
coal  as  fuel.  When  the  plant  dies,  a  small  percentage  escapes 
back  to  the  air  again,  but  the  great  mass  is  added  to  the  wealth 
of  the  soil,  from  which  so  little  was  taken. 

The  proportion  of  sustenance  that  a  plant  takes  from  the  air 
has  been  ascertained  by  experiment  to  be  about  nine  parts  in 
ten.  In  one  case  a  willow  tree  weighing  five  pounds  was  planted 
in  a  box,  in  two  hundred  pounds  of  soil  that  had  been  carefully 
dried  and  weighed.  To  prevent  the  settlement  of  dust  in  s^ny 
appreciable  quantity,  the  soil  was  covered  with  a  metal  plate 
pierced  with  very  fine  holes  to  allow  the  free  passage  of  the  air ; 
and  it  was  moistened  with  rain-water  only.  After  a  few  years 
the  tree  was  removed,  and  the  soil  was  carefully  collected  and 


FLRTILITY   A   PROCESS. — THE   SOIL   A   MIXTURE.       45 

'^nea.     On    weighing   them   it  was   found   that  the  tree   had 
gained  sixty-seven  pounds  and  the  soil  had  lost  eight  ounces. 

The  late  Prof.  J.  F.  Frazer  told  mo  that  while  engaged  in  the  geological 
survey  of  Pennsylvania  ho  found  a  willow  tree  growing  in  tho  cleft  of  a 
rock  whore  there  was  absolutely  no  soil  whatever,  but  a  continual  oozo 
of  water  was  keeping  tho  cleft  moist. 

§  42.  The  fertility  of  the  earth  is  therefore  not  an  accom- 
plished fact,  but  a  vast  process  that  is  still  going  on.  Nature  is 
preparing  for  the  time  when  man  will  make  still  larger  demands 
upon  her  resources  than  at  present.  Even  when  the  fertility 
of  a  piece  of  ground  has  been  exhausted  by  continual  abuse, 
she  brings  her  restorative  energies  into  play.  Thus  the  aban- 
doned tobacco  plantations  of  Eastern  Virginia  have  been  covered 
by  a  growth  of  pines,  whose  long  taproots  reach  down  below 
the  exhausted  surface,  and  bring  up  mineral  substances,  which 
after  the  fall  of  the  leaves  and  the  decay  of  the  stems  enrich 
the  soil.  A  similar  instrument  of  recuperation  nature  furnishes 
to  the  farmer  in  the  clover  plant,  whose  peculiarity  it  is  to  thrust 
down  its  roots  to  the  mineral  subsoil  and  feed  only  upon  that. 

§  43.  The  soil,  it  has  been  already  said,  is  a  mixture  of 
mineral  and  vegetable  matter.  The  former,  even  when  less  in 
amount,  is  by  no  means  inferior  in  importance.  It  predominates 
in  the  subsoil,  and  in  the  best  soils  appears  mainly  as  silicious 
sand  and  clay.  The  first  use  of  the  former  is  to  keep  the  soil  porous 
and  make  it  ready  to  receive, — of  the  latter  to  keep  it  compact 
and  able  to  retain.  An  excess  of  either  substance  imparts  to 
the  soil  a  corresponding  defect. 

In  the  plant  the  silex  or  flint  of  the  sand  reappears  as  the 
skeleton.  The  slight  and  fragile  stalks  of  our  grains  and  grasses 
are  kept  upright  under  their  load  of  seed  by  a  thin  coating  or 
varnish  of  silica.  Every  acre  of  wheat  requires  from  93  to  150 
pounds.  This  mineral  element  is  but  slightly  present  in  the 
fruits  and  seeds  which  man  carries  from  the  soil ;  somewhat 
more  largely  in  the  stems  and  trunks  of  trees,  but  most  of  all 
in  the  leaves  which  return  to  the  soil  at  once,  or  after  having 
served  as  food  for  cattle.  The  leaves  of  trees  contain  fifteen 
times  as  much  as  the  trunks. 


46  ELEMENTS    OF   POLITICAL   ECONOMY. 

§  44.  Persistent  human  stupidity  can  bring  to  nought  the 
most  beneficent  arrangements  of  nature.  The  fertility  of  the 
soil  may  be  destroyed  in  spite  of  tendencies  to  perpetuate  and 
extend  itself,  and  that  in  more  ways  than  one. 

(1)  By  the  absence  of  any  system  of  rotation  of  crops.  Year 
after  year  men  will  take  the  same  elements  from  the  soil  by 
growing  the  same  crop  upon  it,  wheat  or  tobacco,  or  some  other. 
There  is  land  around  Albany  where  forty-five  bushels  to  the  acre 
was  once  no  excessive  yield  in  wheat,  but  where  at  present  not 
more  than  fifteen  can  be  grown.  Much  of  the  country  in  which 
the  last  battles  of  the  late  civil  war  were  fought  is  made  up  of 
exhausted  tobacco  plantations.  The  whole  system  of  Southern 
agriculture  under  the  slaveholding  regime  tended  to  the  same 
result. 

§  45.  (2)  By  continually  taking  away  from  the  soil  and  never 
making  any  return.  The  absence  of  a  single  element  that  enters 
into  the  composition  of  a  plant  will  as  much  prevent  its  growth 
as  would  the  absence  of  all.  "  For  every  fourteen  tons  of 
fodder  carried  ofl^  from  the  soil  there  are  carried  away  two  casks 
of  potash,  two  of  lime,  one  of  soda,  a  carboy  of  vitriol,  a  large 
demijohn  of  phosphoric  acid,  and  other  essential  ingredients" 
(Prof.  Johnston). 

Substances  that  have  served  as  food  for  birds  and  animals  are 
worth  most  to  keep  up  the  fertility  of  the  soil.  In  passing 
through  the  digestive  organs  they  are  reduced  in  size  to  their 
finest  particles,  and  enriched  with  organic  elements,  which  the 
animal  derives  from  the  atmosphere.  They  are  especially  much 
richer  in  nitrogen  than  the  food  itself.  In  some  districts  of 
England  cattle  are  stall-fed  with  oil-cake  and  other  expensive 
foods,  simply  for  the  sake  of  the  manure,  and  by  this  system  one 
district  of  moorland  in  Lancashire  has  been  reclaimed  and 
brought  up  to  a  high  degree  of  fertility. 

Whenever,  therefore,  the  products  of  the  soil  are  consumed 
in  the  vicinity  of  the  farm,  the  farmer  will  have  at  hand  the 
means  of  making  such  a  return  to  the  soil  as  will  keep  up  and 
even  increase  its  fertility.     But  whenever  they  are  transported 


RKTUllN   TO   THK   SOIL. — DENUDATION    OF   TREES.      47 

to  a  considerable  distance  for  consumption  the  power  to  make  an 
adequate  return  to  the  soil  is  seriously  diminished,  if  not  abso- 
lutely destroyed.  The  richest  soil  cannot  long  sustain  such  a 
process  of  exhaustion,  if  its  proprietors  are  engaged  in  sending 
its  natural  wealth  over  land  and  sea  to  a  distant  market. 

§  46.  The  existence  of  the  means  and  the  power  to  make 
adequate  returns  to  the  soil  is  no  guarantee  that  these  will  be 
fully  employed.  Through  the  sewers  of  our  great  cities,  and 
the  rivers  into  which  they  empty,  immense  quantities  of  fertili- 
zing matter  are  poured  into  the  sea,  and  are  thus  utterly  lost. 
The  soil  around  the  city  of  Chicago,  for  instance,  is  naturally 
sterile ;  in .  the  refuse  of  her  slaughtering-houses  the  city  has 
the  means  of  raising  it  to  a  very  high  degree  of  fertility.  At  a 
great  expense  provision  has  been  made  to  carry  off  the  whole 
mass  and  pour  it  through  the  Illinois  and  the  Mississippi  rivers 
into  the  Gulf  of  Mexico  ;  on  all  hands  the  measure  is  applauded 
as  a  bold  and  wise  piece  of  engineering.  Belgium  is  the  only 
civilized  nation  that  is  fully  awake  to  the  importance  of  this 
subject,  but  England  bids  fair  to  emulate  her. 

§  47.  (3)  The  fertility  of  a  country  may  be  destroyed  by 
stripping  it  of  its  trees,  which  seem  to  affect  very  greatly  the 
amount  of  rain  that  falls  on  its  surface.  In  some  parts  of 
upper  India  the  trees  have  been  cut  away,  the  wells  have  sunk, 
the  raiu-fall  has  ceased,  and  the  country  threatens  to  become  a 
wilderness.  The  Punjaub  seemed  likely  to  meet  the  same  fate  ; 
when  the  British  cojjquered  it  not  a  single  tree  was  observed  in 
its  vast  area,  and  the  country  was  rapidly  becoming  a  desert, 
when  its  plantation  was  begun  and  the  waste  was  arrested. 
Nuraidia,  the  Plain  of  Babylon,  and  Judea  are  instances  of 
countries  once  proverbially  fertile,  and  now  barren  (it  is 
believed)  through  denudation.  When  Europeans  occupied 
the  Cape  Verde  and  Canary  Islands,  and  St.  Helena,  they 
found  them  well  wooded  and  fertile.  As  the  trees  have  been 
recklessly  cut  down,  droughts  have  become  common,  and  the 
capacity  of  the  islands  to  support  a  large  population  has  disap- 
peared.    The  increasing  sterility  of  parts  of  France,  of  Lorn- 


48  •  ELEMENTS    OF   POLITICAL   ECONOMY. 

bardj,  and  of  large  districts  of  Spain,  is  ascribed  to  the  sanie 
cause.  In  Lombardy  it  has  been  found  that  the  denudation  of 
the  country  contributes  to  the  rapidity  and  the  volume  in  which 
its  light  and  friable  soil  is  washed  into  the  Adriatic  by  the  Po 
and  its  tributaries.  Great  injury  has  thus  been  done  to  the 
agricultural  capacity  of  the  country,  and  still  greater  is  feared. 
And  as  a  rule,  the  absence  of  trees  seems  to  lead  to  the  concen- 
tration of  the  rain-fall  in  great  storms,  and  the  disappearance  of 
better  distributed  and  more  moderate  showers.  The  streams 
alternate  between  the  destructive  violen-ce  of  torrents  and  the 
desolation  of  drought.  The  tribes  of  Arabia  perceived  the  con- 
nection between  drought  and  the  absence  of  trees;. the  oldest 
law  recognised  as  binding  on  the  whole  peninsula  is  one  for 
their  protection,  and  it  was  repeated  in  the  injunctions  given 
by  the  Prophet  and  the  Caliphs  to  the  captains  whom  they  sent 
forth  to  subdae  the  world. 

§  48.  All  these  ruinous  results  are  matters  for  control  and 
correction  by  the  action  of  the  state.  Individual  selfishness  is 
always  shortsighted  3  the  nation  as  the  supreme  owner  of  the 
national  domain  has  the  fullest  right  to  guard  against  its  reckless 
exhaustion.  The  state  is  owner  of  the  national  domain  in  a 
sense  that  is  not  true  of  individual  proprietors.  Much  or  all 
of  it  that  is  incapable  of  individual  appropriation,  is  national 
property, — such  as  rivers  and  other  inland  waters,  harbors  and 
fisheries. 

Especially  is  it  a  question  of  national  policy,  because  insoluble 
to  individual  efibrt.  to  bring  the  farmer  and  artisan  into  neigh- 
borhood, and  secure  the  consumption  of  the  crops  within  rea« 
sonable  distance  of  the  farm. 


CHAPTER  FOURTH. 
The  Science  and  Economy  of  Population-. 

§  49.  The  evolution  of  life  upon  our  planet,  after  passing 
through  the  vegetable  and  the  merely  animal  stages,  was  crowned 
in  the  advent  of  man,  the  especial  theme  of  social  science.  All 
the  great  processes  of  nature's  development  that  preceded  his 
coming,  were  but  preparations  to  fit  the  earth  to  bo  his  home, 
and  to  gratify  the  capacities  and  bring  into  action  the  powers 
with  which  he  was  endowed.  The  earth  was  given  into  his 
hands,  and  he  was  commanded  to  "multiply  and  replenish  the 
earth  and  subdue  it." 

§  50.  To  "  subdue  the  earth,"  to  become  master  over  nature, 
is,  as  we  have  seen,  only  another  way  of  stating  the  transition 
from  poverty  to  wealth.  And,  as  the  command  implies,  that 
transition  has  gone  hand  in  hand  with  the  increase  of  numbers. 
In  the  earlier  stages  of  society  man  lives  in  comparative  isola- 
tion from  his  fellows,  weak  in  the  presence  of  nature's  vast 
powers  and  therefore  poor  in  the  command  of  her  resources 
The  scattered  families,  the  isolated  tribes,  are  unequal  to  helpful 
cooperation ;  for  the  most  part  they  are  confined  to  the  UvSe  of 
such  of  nature's  provisions  as  are  easily  accessible  to  their  inef- 
fectual and  wasteful  labor.  First  the  wild  beasts  and  birds  and 
fruits  of  the  forest  are  brought  into  use;  then  the  peaceful 
flocks  whose  skins  furnish  ready-woven  clothing,  and  whose 
milk  and  flesh  supply  food.  The  wealth  of  the  mine,  of  the 
grain-field,  of  the  cotton  plantation,  are  utterly  beyond  their 
reach. 

§  51.  But  with  the  growth  of  numbers  too  great  to  be  fed  by 
the  mere  pasturage  of  the  land,  comes  the  transition  to  agricul- 
tural industry.  New  powers  of  nature,  forces  that  lay  unused 
BO  long  as  the  scantiness  of  men  forbade  eflBcient  cooperation  for 
their  mastery,  are  made  to  serve  man ;  cattle  that  ran  wild  and 
were  slain  for  food,  are  tamed  to  the  labors  of  plough  and  cart ; 
4  49 


50  ELEMENTS   OF    POLITICAL   ECONOMY. 

plants  that  grew  wild  on  the  hillside  are  brought  under  culture^ 
and  by  improvement  and  the  selection  of  seed,  produce  an  ever- 
increasing  quantity  of  food  and  clothing.  The  waterfall  that 
fell  idly  over  the  rocks,  or  the  wind  that  blew  unburdened  as  it 
listed,  turns  the  mill ;  the  peat  and  coal  that  lay  neglected  are 
made  into  fuel.  A  division  of  labor  separates  the  functions  of 
the  human  members  of  society,  and  each  species  of  work  ia 
done  more  effectively  and  productively  for  employing  the  whole 
time  and  attention  of  the  men  employed  in  it.  Better  tools  and 
implements  are  invented;  and  last  of  all,  machinery,  and  the 
giant  forces  that  actuate  it,  come  into  play  in  man's  service, 
taking  the  place  of  muscular  strength,  and  at  every  advance 
lowering  the  value  of  articles  of  utility,  and  making  them 
obtainable  in  larger  quantities  and  by  a  larger  number  of 
persons. 

§  52.  At  every  step  in  this  great  pa.st  of  man's  industrial 
development,  the  growth  of  numbers  and  of  wealth  has  gone  on 
with  equal  strides.  In  the  earlier  stages  the  pressure  of  popu- 
lation upon  the  means  of  subsistence  is  marked  and  painful; 
yet  beneficent,  as  thrusting  men  into  closer  and  more  helpful 
association,  and  forcing  them  to  adopt  wiser  and  better  methods. 
But  every  advance  has  been  richly  rewarded,  for  with  each 
acceleration  in  the  rapidity  of  social  movement,  Ihe  resistance  to 
be  overcome  has  diminished.  Each  generation  has  worked  not 
for  itself  only,  but  for  all  that  were  to  come ;  and  the  result  of 
all  wisely  directed  work  has  been  to  make  easier  and  more 
effective  the  task  of  those  who  came  later.  "  Other  men 
labored ;  ye  have  entered  into  their  labors." 

§  53.  It  is,  therefore,  apart  from  all  merely  ethical  considera- 
tions, a  wise  economic  policy  for  a  nativn  to  guard  the  lives  and 
the  health  of  its  people,  and  to  remove  all  artificial  obstructions 
to  the  natural  growth  of  population.  It  is  indeed  the  duty  cor- 
relative to  its  right  to  command  their  lives  and  persons  in  its 
own  defence ;  but  it  is  also  the  best  policy,  in  view  of  both  the 
military  strength  and  the  industrial  welfare  and  contentment  of 
its  people.     For  the  more  people  there  are  productively  employed 


^    THE   STATE  THE   STEWARD   OF    LIFE   AND   HEALTH.     61 

in  any  well-managed  country,  the  greater  the  share  of  food  and 
clothing,  of  necessaries  and  comforts,  that  will  fall  to  each  one 
of  them.  Whatever  tends  to  diminish  their  numbers, — or,  what 
comes  to  much  the  same  thing,  to  lower  their  bodily  health  and 
strength — has  also  the  tendency  to  impoverish  them  by  diminish- 
ing their  power  of  cooperation  and  association.  Every  retro- 
gression to  the  sparse  numbers  of  earlier  times,  is  also  a  retro- 
gression to  their  poverty. 

§  54.  "  But,^'  it  will  be  said,  "  what  need  is  there  of  state 
interference  in  the  matter  ?  In  every  man's  breast  is  implanted 
the  instinct  of  self-preservation,  to  lead  him  to  take  care  of  him- 
self. Surely  we  can  leave  this  matter  to  individual  action,  and 
to  the  voluntary  cooperation  of  individuals."  The  instinct  in 
question  is  exceedingly  eflfcctive  as  a  motive  in  the  presence  of 
visible  and  well-understood  danger.  But  where  the  peril  is 
more  recondite,  though  not  less  real,  the  instinct  is  good  for 
nothing.  Only  reflection  and  forethought,  accompanied  with  a 
large  and  exact  knowledge  of  the  scientific  conditions  of  life  and 
health,  and  a  readiness,  by  no  means  universal,  to  act  upon 
these,  is  suflSicient  in  this  case.  The  state  can  command  the 
services  and'  opinions  of  the  best  judges  ;  it  can  carry  out  whole- 
sale measures,  and  override  the  mulish  opposition  of  wrong- 
headed  people,  in  cases  where  only  general  action  is  of  any  avail. 
In  so  doing,  it  is  not  overriding  "  the  judgments  of  individuals 
respecting  their  own  interests,  but  giving  efi'ect  to  that  judgment; 
they  being  unable  to  give  effect  to  it  except  by  concert,  which 
concert  again  cannot  be  effectual  unless  it  receives  validity  and 
sanction  from  the  law"  (J.  S.  Mill).  Thus  in  England  the  law 
recently  passed  to  limit  the  hours  of  work  in  mills  and  factories 
for  mairied  women,  received  the  support  of  nearly  all  that' class 
of  mill-hands.  They  were  free  to  make  such  private  contract 
with  the  mill-owner  as  they  pleased,  but  in  fact  their  freedom 
amounted  to  nothing  whatever  until  the  law  required  them  to 
refuse  excessive  work. 

In  other  cases  the  right  of  state  interference  rests  on  the  same 
g'-ound  as  the  laws  that  forbid  and  furnish  attempts  at  self- 


52  ELEMENTS    OF    POLITICAL    ECONOMY. 

murder.  The  man  who  persists  in  maintaining  a  dunghill  or  a 
cesspool  under  his  windows,  or  in  living  in  a  house  sordid  with 
filth  or  imperfectly  ventilated,  may  have  the  excuse  of  igno- 
rance, lut  society  has  not.  The  officers  of  the  state  have  as 
much  right  to  force  him  to  reform  these  things,  as  they  would 
have  to  dash  a  dose  of  poison  out  of  his  hand.  In  some  cases 
there  is  not  even  this  excuse.  Certain  trades,  such  as  cutlery- 
grinding  in  Sheffield,  are  paid  at  a  high  rate  because  thev  prove 
fatal  in  ten  or  fifteen  years  to  those  who  engage  in  them ;  but 
the  workmen  have  been  known  to  resist  stoutly  any  provision 
that  was  meant  to  diminish  the  risk  (or  rather  to  postpone  the 
certainty)  of  death,  as  tending  to  lower  wages.  "A  short  life 
and  a  merry  one  I"  is  the  reckless  saying  with  which  such 
people  take  their  lives  in  their  hands. 

§  55.  The  state,  then,  is  the  steward  of  the  life  and  the  health 
of  its  individual  members.  There  are  many  measures  by  which 
it  naturally  and  fitly  discharges  this  trust;  such  as  (1)  requir- 
ing local  governments  and  municipalities  to  enforce  public  clean- 
liness and  to  provide  thorough  drainage,  and  good  roads  fur  safe 
travel;  (2)  by  quarantining  vessels  and  persons  who  come  from 
places  where  infectious  diseases  are  raging;  (3)  by  enjoining  the 
adoption  of  preventive  measures  (disinfectants,  vaccination, 
&c.),  in  times  of  epidemics ;  (4)  by  chartering  and  endowing 
colleges  competent  to  give  medical  instruction  and  to  grant 
medical  degrees,  and  by  requiring  that  a  doctor  so  qualified 
shall  sign  a  certificate  of  death  and  of  its  cause,  before  legal  in- 
terment shall  take  place ;  (5)  by  forbidding  the  sale  of  unripe, 
overripe,  diseased  or  adulterated  articles  of  food  ;  (6)  by  forbid- 
ding women  and  minors  from  engaging  in  excessive  work  or  in 
night-work  in  factories;  (7)  by  requiring  that  dangerous  employ- 
ment^ shall  only  be  carried  on,  and  explosive  machines  used, 
with  all  possible  precautions  for  the  safety  of  the  workmen  and 
the  public,  and  by  enforcing  this  by  generaLstate  inspection. 

Besides  these  negative  checks  on  the  waste  of  human  life  and 
health,  there  are  many  positive  measures  that  contribute  to  the 
same  end.     Such  are  the  public  instruction  of  the  young  in  the 


LAW     OF    POPULATION."  53 

first  principles  of  practical  hygiene;  the  establishment  of  public 
buths,  parks  and  gymnasia;  the  requiring  of  cities  to  furnish 
an  abundance  of  pure  water,  and  to  see  that  it  is  introduced  into 
every  house. 

It  is  questionable  whether  the  sale  of  what  are  called  patent  mcdioincs 
should  be  allowed  by  the  state.  Most  of  these  substances,  I  believe,  are 
compounds  that  would  be  useful  in  some  cases  of  disease,  but  are  exceed- 
ingly dangerous  when  used  indiscriminatingly,  as  they  must  be  in  the 
absence  of  competent  advice.  Others  are  simply  fraudulent,  and  con- 
tain nothing  that  could  hare  any  effect,  either  good  or  bad. 

§  56.  But  all  this  is  open  to  a  general  objection,  that  has 
occupied  a  very  large  space  in  the  discussion  of  this  subject. 
It  will  be  said  that  measures  to  hinder  the  action  of  those 
destructive  agencies,  and  more  especially  such  as  tend  to  promote 
and  foster  the  increase  of  a  nation's  population,  will  do  a  very 
great  deal  of  mischief  instead  of  good.  For  unless  something 
check  it,  the  number  of  people  in  a  country  will  double  every 
twenty-five  years,  and  go  on  increasing  in  a  geometrical  ratio, 
while  subsistence  increases  only  by  an  arithmetical  increment. 
Thus  in  two  centuries,  "  taking  the  whole  earth  and  supposing 
the  present  population  equal  to  a  thousand  millions,  the  human 
species  would,"  if  the  growth  were  thus  unchecked,  "  increase 
as  the  numbers  1,  2,  4,  8, 16,  32,  64,  128,  256;  and  subsist- 
ence as  1,  2,  3,  4,  5,  6,  7,  8.  In  two  centuries  the  population 
would  be  to  the  means  of  subsistence  as  256  is  to  9 ;  in  three 
centuries  as  4096  is  to  13;  and  in  two  thousand  years  the  dif- 
ference would  be  incalculable"  (Rev.  T.  R.  Malthus). 

Mr.  Malthus's  Essay  on  Population  appeared  in  1798.  Its  main  posi- 
tion was  anticipated  by  Herrenschwand  {Diecoura  fondamental  sur  la 
Population,  1786),  but  the  theory  obtained  its  wide  currency  through  the 
English  writer.  It  was  eloquently  opposed  by  Godwin,  the  author  of 
Political  Justice  ;  then  in  detail  by  Sadler,  Allison,  Doubleday,  N.  W. 
Senior  and  Quetelet.  Its  latest  English  opponents  are  Herbert  Spencer 
and  W.  R.  Greg.  The  latter  says  :  "  The  doctrine  has  been  accepted  by 
every  writer  of  repute  on  economical  subjects.  .  .  None  of  the  many 
authors  who  have  questioned  or  assailed  it,  .  .  .  have  been  able  to  shake 
in  any  degree  its  hold  upon  the  public  mind.  .  .  It  has  reniained 
the  fixed,  axiomati?  belief  of  the  educated  world."  {The  Enigmaa  of  Life.') 


6i  ELEMENTS   OF    POLITICAL   ECONOMY. 

§  57.  If  this  view  be  correct,  it  is  not  the  growth  of  popula- 
tion, but  the  efficiency  of  the  ''checks^'  upon  it,  that  best  con- 
tributes to  the  well-being  of  the  nation.  These  checks  are  of 
two  kiods:  (1)  positive,  such  as  war,  famine,  pestilence,  &c. ; 
(2)  preventive,  such  as  sexual  immorality  and  voluntary  celi- 
bacy. The  practical  inferences  drawn  by  Mr.  Malthus  and  his 
school  from  this  theory  were  that  wherever  the  state  can  dis- 
courage the  increase  of  the  population  without  interfering  with 
personal  liberty,  it  should  do  so.  Regarding  pauperism  as  the 
result  of  over-population,  they  were  in  general  opposed  to  any 
provision  for  the  poor,  either  public  or  private ;  regarding  that 
as  a  premium  upon  recklessness  and  self-indulgence,  and  as  a 
useless  interference  between  the  violators  of  a  divine  law  and 
their  divinely-appointed  punishment.  Or  if  provision  must  be 
made  for  the  poor,  they  would  have  it  managed  in  such  a  way 
as  to  discourage  and  prevent  "  the  propagation  of  a  race  of 
paupers.'*^  They  especially  labored  to  create  a  strong  public 
opinion  on  the  subject,  and  to  diffuse  this  through  all  classes. 
J.  S.  Mill  would  have  'Hhe  producing  large  families"  "  regarded 
with  the  same  feeling  as  drunkenness  or  any  other  physical 
excess.'' 

One  inference  drawn  from  the  theory  was  that  a  high  rate  of 
wages  is  exceedingly  undesirable.  For  when  working  people 
are  paid  abundantly  they  naturally  become  reckless  as  regards 
the  future ;  the  rate  of  increase  is  accelerated,  the  labor-market 
overstocked,  and  the  workmen  must  suffer  a  fall  of  wages  to  or 
even  below  "the  natural  rate"  again.  Any  high  rate  must 
therefore  be  merely  temporary,  and  add  to  the  misery  and  dis- 
content of  the  working  classes,  by  accustoming  them  to  enjoy- 
ments, which  they  afterwards  lose  the  power  to  command. 

§  58.  The  theory  obtained  general  currency  in  England  and 
some  other  countries  as  an  easy  and  not  unsatisfactory  explana- 
tion of  the  misery  that  existed  in  the  closely  settled  countries 
of  Europe.  It  was  an  explanation  that  involved  no  censure  of 
the  leaders  in  social  policy,  and  that  gave  full  sanction  to  their 
disposition  to  give  themselves  as  little  trouble  as  need  be  about 


VARIOUS    INTERPRETAriONS    OF    MALTIIUS.  hi} 

the  sufforinji;  classes.  But  it  had  sucli  a  plausibility  in  it,  that 
men  of  quite  another  stamp  adopted  it  heartily, — nieii  like 
Chalmers  and  the  younger  Mill,  who  really  longed  and  labored 
fur  the  social  elevation  and  welfare  of  their  countrymen. 

§  59.  The  earlier  disciples  of  Malthus,  and  their  master, 
tr(!ated  this  alleged  tendency  of  population  to  outrun  subsistence 
as  an  insurmountable  obstacle  to  the  permanent  welfare  of  the 
mass  of  mankind.  In  the  several  editions  of  the  Essay  on 
Population^  his  statements  of  this  opinion  are  somewhat  toned 
down  in  concession  to  hostile  criticism ;  but  even  the  last  re- 
mains open  to  the  same  interpretation.  Or  if  he  has  any  hope, 
it  is  from  the  progress  of  society  in  education  and  knowledge, 
until  all  men  shall  be  able  to  "read,  mark,  learn  and  inwardly 
digest"  his  pleas  for  voluntary  restraint  in  this  matter.  (He 
himself  had  only  eleven  children,  as  M.  de  Sismondi  tells  us.) 
Mr.  McCulloch  also  lays  it  down  as  a  "  principle  that  the  power 
of  increase  in  the  human  species  must  always,  in  the  long  run, 
prove  an  overmatch  for  the  increase  of  the  means  of  subsist- 
ence." James  Mill  says :  "  The  general  misery  of  mankind  is 
a  fact  which  can  be  accounted  for  upon  one  only  of  two  posi- 
tions, either  that  there  is  a  tendency  in  population  to  increase 
faster  than  capital,  or  that  capital  has  by  some  means  been  pre- 
vented from  increasing  so  fast  as  it  has  a  tendency  to  increase." 
Rejecting  the  latter  of  the  two  suppositions,  he  accepts  the 
former  as  the  fact.  And  he  declares  that  "  however  slow  the  in- 
crease of  population,  provided  that  of  capital  is  still  slower, 
wages  will  be  reduced  so  low  that  a  portion  of  the  population 
will  regularly  die  of  want." 

§  60.  The  later  writers  of  this  school  seem  inclined  to  lay 
more  stress  upon  the  counteracting  forces,  viz.  :  the  growth  of 
subsistence  and  the  checks  to  population.  Archbishop  Whatcly 
even  assigns  to  these  the  rank  of  a  counter-tendency,  comparing 
the  two  to  the  centrifugal  and  the  centripetal  forces  that  keep 
the  earth  for  ever  moving  in  the  same  orbit,  and  emphasizing 
the  f^ict  that  "  much  as  our  population  has  incrca.sed  within  the 
last  five  centuries,  it  yet  bears  a  far  less  ratio  to  subsist-euce  than 


56  ELEMENTS    OF   POLITICAL   ECONOMY. 

it  did  five  hundred  years  ago."  N.  W.  Senior  offering  a  mass 
of  evidence  to  the  same  purpose,  says  :  "  I  helieve  in  the  actual 
power  of  population  to  increase  so  as  to  press  upon  the  means  of 
subsistence.  I  deny  the  habitual  tendency.  I  believe  the 
tendency  to  be  just  th-e  reverse."  Yet  he  also  says  that  "■  there 
are  few  portions  of  Europe  the  inhabitants  of  which  would  not 
be  richer  if  their  numbers  were  fewer,  and  would  not  be  richer 
hereafter  if  they  were  now  to  retard  the  rate  at  which  their 
population  is  increasing." 

§  61.  Mr.  John  Stuart  Mill  better  represents  the  great  mass 
of  English  writers  on  this  topic.  He  holds  that  the  tendency 
pointed  out  by  Malthus  is  the  constant  element  in  the  problem, 
and  all  others  are  inconstant  and  variable.  Not  that  there  is 
any  need  to  despair  in  view  of  this  fact.  If  the  mass  of  society 
were  really  and  generally  enlightened,  the  preventive  check  of 
abstinence  would  be  quite  sufficient  to  overmaster  this  unhappy 
and  dangerous  tendency.  All  the  progress  of  human  civiliza- 
tion has  been  through  the  growing  ascendancy  of  man's  higher 
over  his  lower  nature.  The  race  of  men  have  their  future  in 
their  own  hands  in  this  matter,  and  as  they  awake  to  the  realiza- 
tion of  the  fact,  they  will  govern  themselves  more  wisely.  The 
social  moralist  might  fairly  object  here  that  this  constant  victory 
of  the  higher  nature  of  man  has  been  won  through  men  enter- 
ing into  those  relationships  from  which  Mr.  Mill  would  have 
them  abstain,  and  from  their  being  drawn  out  of  their  sordidness 
and  selfishness  thereby.  Some  of  the  social  regulations  and  in- 
stitutions on  the  Continent,  which  Mr.  Mill  unhappily  chose  for 
eulogy,  show  us  by  their  effects  that  whatever  discipline  the 
self-contained  philosopher  may  find  in  this  solitary  life,  it  is  to 
the  mass  of  men  the  road  to  degradation  and  debasement. 

But  we  need  not  go  out  of  the  strictly  economic  sphere,  nor 
even  outside  of  Mr.  Mill's  concessions,  to  find  arguments.  Since 
the  law  was  enunciated,  whatever  its  acceptance  by  the  intellectual 
classes,  the  mass  of  men  have  neither  believed  nor  acted  on  it. 
Yet,  as  Mr.  Mill  admits,  the  actual  state  of  society,  as  compared 
with  what  it  was,  does  not  bear  out  the  theory.     "  This  does  not 


MISERY   EXCEPTIONAL. — ITS   DECREASE.  57 

prove  that  the  Uiw  does  not  exist,  but  only  that  some  antagonistic 
principle  is  at  work  which  is  capable  for  a  time  of  making  head- 
way a^-iainst  the  law."  This  exceptional  and  antagonistical 
principle  he  finds  in  the  progress  of  material  civilization  ;  that 
is,  in  the  growth  of  man's  power  over  nature  and  her  utilities. 
He  specifies  the  improvements  in  agriculture  and  in  machinery, 
bett^jr  roads  and  means  of  communication,  and  the  spread  of 
education.  Very  right,  save  in  regarding  civilization  and  its 
progress  as  exceptional,  whereas  it  is  the  law ;  and  in  accepting 
misery  as  the  law,  whereas  it  is  the  needless  exception.  In  this 
point  lies  the  deepest  ground  of  distinction  between  the  English 
view  of  the  subject  and  that  here  advocated.  The  latter  looks 
to  the  future  hopefully,  tracing  there  with  prophetic  foresight 
all  the  great  ascending  lines  of  human  progress  as  carried  for- 
ward without  stop  or  limit.  The  other  regards  that  future  with 
despondency,  or  at  least  a  gloomy  uncertainty,  being  most  im- 
pressed with  the  existence  of  forces  and  tendencies  that  have 
wrought  misery  and  promise  ruin. 

§  62.  The  theory  is  discredited  by  the  experience  of  the  past 
in  this  matter.  The  pressure  of  population  upon  subsistence  is 
characteristic  of  the  periods  and  the  places  where  population  is 
most  sparse, — not  of  those  where  it  is  densest.  "  Let  any  one," 
says  Mr.  McCulloch,  whom  we  quoted  above,  "compare  the 
state  of  this  or  of  any 'other  European  country  five  hundred  or  a 
thousand  years  ago,  and  he  will  be  satisfied  that  prodigious 
advances  have  been  made,  that  the  means  of  subsistence  has  in- 
creased much  more  rapidly  than  population,  and  that  the  labor- 
ing classes  are  now  generally  in  possession  of  conveniences  and 
luxuries  that  once  were  not  enjoyed  by  the  richest  lord." 

Take  the  extreme  case  of  Belgium,  whose  Flemish  provinces, 
though  naturally  poor  in  soil,  are  the  most  densely  peopled 
district  in  the  world.  In  spite  of  the  absence  of  large  manu- 
factures and  a  too  general  dependence  on  agriculture,  the  stand- 
ard of  comfort  is  high,  and  continues  to  rise.  Switzerland  rivals 
these  provinces  in  density  of  population  and  in  the  general  difi'u- 
sion  ol*  comfort  among  her  people.     Were   the  population  of 


58  ELEMENTS   OF    POLITICAL   ECONOMY. 

Europe  to  be  doubled,  there  is  no  reason  to  suppose  the  soil 
would  furnish  them  insufficient  support.  Deducting  one-third 
of  her  soil  as  not  arable,  and  assigning  two  acres  per  head  to  her 
possible  population,  she  would  easily  support  800  millions,  or 
three  times  her  present  population.  Yet  Zurich  has  one  person 
to  every  one  and  a  quarter  acres. 

Belgium  has  440  people  to  the  square  mile;  one  of  her  Flemish  pro- 
vinces has  1800.  Four  cantons  of  Switzerland  approach  her  average; 
Basle  420;  Argovie  398;  Thurgovie  368;  Zurich  365.  Lombardy  has 
370;  England  and  Wales  350;  Holland  300;  Italy  225;  France,  Ger- 
many and  Ireland  180;  Austria  164;  Switzerland  157;  Spain  90;  Turkey 
in  Europe  76;  Russia  30;  Sweden  22. 

Asia  is  generally  regarded  as  the  cradle  of  the  human  race. 
Here  then  we  must  find  — if  anywhere — the  sad  effects  of  a 
prolonged  multiplication  of  the  race.  Yet  Asia  is  only  one-third 
as  densely  peopled  as  Europe,  and  the  part  of  Asia  in  which 
population  is  densest,  Hindoostan,  is  capable  of  supporting  a 
much  greater  number. 

The  stories  told  of  the  density  of  the  population  in  China,  like  many 
other  details  about  that  empire  that  have  come  down  from  last  century, 
are  apocryphal.  China,  according  to  the  census  of  1864,  has  about  260 
to  the  square  mile ;  but  Chinese  statistics  are  not  very  trustworthy.  The 
census  of  1812  put  the  density  at  283  to  the  square  mile. 

America,  Africa  and  Australasia  are  but  very  thinly  settled, 
and  it  is  hardly  possible  to  estimate  the  greatness  of  the  popula- 
tion which  they  are  capable  of  supporting. 

§  63.  Of  the  soil  actually  under  cultivation,  not  more  than  a 
very  small  part  is  cultivated  as  it  might  be,  even  in  the  existing 
stage  of  agricultural  science.  The  average  yield  of  wheat  in 
England,  for  instance,  is  26  bushels  to  the  acre.  But  the  fact  that 
57  and  even  60  bushels  have  been  grown  is  enough  to  show  that 
England  is  under  no  necessity  to  import  one-fourth  of  her  bread- 
stuffs.  Only  a  very  small  part  of  her  soil  is  farmed  scientific- 
ally, and  official  returns  made  in  1873  show  that  she  has  seven 
and  a  half  million  acres,  more  than  half  of  them  in  th^  most 
fertile  part  of  the  island,  not  under  cultivation.  In  the  opinion 
of  N.  W.  Senior  the  yield  of  food  would  be  quadrupled  during 


BETTER  FARMING  NEEDED. — EARLY  FAMINES.    59 

tbo  century  then  beginning  (1835),  and  might  possibly  be  multi- 
plied tenfold.  Even  soil  that  is  held  too  poor  to  repay  cultiva- 
tion, may  be  made  fertile  by  the  skill  of  the  agricultural 
chemist.  Thus  Mr.  Huxtable  on  an  acre  of  chalk  down — gene- 
rally given  up  to  the  sheep — raised  twenty-five  tons  of  turnips, 
two  years  running,  at  a  less  expense  than  is  usually  required  for 
a  scantier  crop  on  good  soil. 

But  these  better  methods  are  the  product  of  an  age  when 
population  is  dense,  cooperation  easy,  and  the  human  mind  is  in 
high  activity. 

Great  Britain  contains  56,815,353  acres,  of  which  only  31,102,600  acres 
are  cultivated,  and  2,187,078  acres  are  returned  as  woods  and  plantations 
for  the  growth  of  timber  or  the  protection  of  game ;  leaving  23,525,675 
acres  in  a  state  of  nature.  Of  this  Wales  has  nearly  2,000,000;  England 
about  7,500,000,  and  the  rest  is  in  Scotland.  Most  of  this  is  in  the  moun- 
tainous counties,  northern  and  south-western ;  but  over  18  per  cent,  of  the 
most  fertile  parts  of  the  kingdom  are  still  uncultivated.  Outside  of  the 
Scandinavian  kingdoms,  which  may  be  compared  to  Scotland,  no  Euro- 
pean country  of  which  we  have  trustworthy  statistics,  allows  so  much  of 
its  domain  to  lie  idle.  Austria  proper  has  eight  per  cent,  uncultivated; 
Bavaria  less  than  six  and  a  half;  Wurtemburg  not  five. 

§  64.  The  earlier  records  of  all  civilized  countries,  and  the 
existing  state  of  savage  nations,  disclose  to  us  habitual  poverty, 
frequent  fiimincs  and  consequent  pestilences.  In  the  JSoxon 
Chronicle  and  the  earlier  mediaeval  historians,  there  is  a  sad  and 
monotonous  record  of  famines,  year  after  year ;  and  England  is 
no  exception  among  European  nations.  Since  the  populations 
have  trebled  and  quadrupled,  they  are  rarely  heard  of,  save  in 
thinly-settled  countries  like  Sweden  and  Persia.  If  they  occur 
elsewhere,  they  are  owing  to  drought  or  some  other  unforeseen 
calamity,  and  owe  much  of  their  desolating  force  to  the  bad 
economic  management  that  has  kept  the  whole  people  to  a  single 
occupation,  or  made  them  dependent  upon  a  single  crop;  for  a 
failure  or  a  series  of  failures  of  that  crop  must  produce  dreadful 
misery.  But  that  is  the  condition  of  an  undeveloped  and  im- 
perfect society,  not  of  one  whose  industrial  growth  has  been 
allowed  to  keep  pace  with  its  growth  of  numbers.  *'  But  even 
Ireland,  poor  and  populous  as  she  '.a,  suffers  less  from  want  with 


60  ELEMENTS    OF   POLITICAL   ECONOMY. 

her  eight  millions  of  people  [1829]  than  when  her  only  inhabit- 
ants were  a  few  septs  of  hunters  and  fishers."  So  again  in  our 
own  country,  a  large  proportion  of  the  early  colonists  from 
Europe  died  of  hunger  and  privation,  and  colonies  were  broken 
up,  because  their  lack  of  numbers  and  of  the  power  of  mutual 
help  made  them  unable  to  cope  with  the  resistances  of  nature. 
Their  successors  struggled  long  with  the  hardships  of  their  life. 
As  numbers  grew,  famines  disappeared;  a  century  ago  two  or 
three  millions  were  abundantly  fed  on  the  soil  that  had  hardly 
supported  forty  thousand  Indians  before  the  coming  of  the  white 
man.  A  much  vaster  number  is  now  still  more  abundantly  pro- 
vided for,  from  the  food  grown  in  the  same  area. 

"  Whatever  tends  to  develop  the  natural  resources  of  a 
country,  to  call  forth  a  spirit  of  enterprise  among  its  inhabitants, 
to  render  each  part  less  dependent  upon  itself,  and  to  bind  up 
the  commonwealth  by  the  ties  of  mutual  assistance  and  common 
interest,  tends  to  mitigate  the  actual  pressure  of  a  famine.  The 
whole  list  may  be  expressed  in  four  words — enlightened  govern- 
ment and  modern  civilization.  These  are  the  specifics  for  famine. 
Where  they  exist,  scarcity  will  never  result  in  depopulation. 
Where  they  do  not,  the  utmost  endeavors  of  government  may 
mitigate,  but  they  cannot  avert." — Hunter's  Annals  of  Rural 
Bengal,  p.  55. 

§  65.  History  shows  us  also  that  a  vast  decrease  in  the  popu- 
lation of  a  country,  through  the  sweeping  operation  of  Mr. 
Malthus's  positive  and  preventive  checks,  is  a  dangerous  possi- 
bility. The  investigations  of  Dureau  de  la  Malle  and  Zumpt 
have  established  the  fact — now  accepted  by  scholars  generally — 
that  the  vast  decline  in  its  population  was  a  chief  cause,  if  not 
the  cause,  of  the  overthrow  of  the  Roman  Empire  by  the  bar- 
barians. Greece  declined  steadily,  in  this  respect,  from  the 
time  of  the  Persian  wars ;  Italy  from  that  of  the  struggle  with 
Carthage.  The  free  population  of  Italy — not  including  Cis- 
alpine Gaul — at  that  period  was  about  three  millions ;  the  de- 
crease was  so  marked  and  rapid  that  the  Jus  trium  liherorum  wah 
created  to  make  marriage  a  profitable  investment,  and  diacour- 


"ROME   FELL   FOR   WANT   OF   MKN."  61 

aj^o  ;e!ibacy.  The  speech  of  the  Censor  Mctcllus,  in  praise  of 
mar  iage  as  a  duty  though  au  unpleasant  one,  was  revived  and 
rea(f  in  the  senate  by  Augustus  Caosar,  and  a  multitude  of*  laws 
passed,  hut  to  no  lasting  purpose.  The  great  famines  and 
pestilenees  of  the  times  of  the  Antonines  made  the  ruin  of  the 
Empire  only  a  question  of  time.  The  benefits  that  might  have 
been  expected  from  the  diffusion  of  Christianity  and  the  restora- 
tion of  public  morality  and  the  sanctities  of  the  family  life, 
were  frustrated  by  the  extravagant  estimate  put  upon  celibacy 
as  a  religious  virtue.     At  last  '*  Rome  fell  for  want  of  men." 

See  Seeley's  Roman  Imperialism,  First  Essay.  The  name  proletariat, 
given  to  the  lower  classes  of  the  Roman  population,  means  that  the  state 
supported  them  in  idleness  simply  that  by  the  growth  of  their  oflFspring 
{proles)  the  state  might  be  strengthened. 

*'  The  process  of  depopulation  in  many  provinces  of  the 
Roman  dominions,  since  the  times  of  the  Antonines,  has  been 
excessive,  and  unaccountable  on  any  of  Malthus's  hypotheses. 
We  may  instance  especially  the  north  of  Africa,  so  populous  in 
the  palmy  days  of  Rome,  and  Asia  Minor  and  Syria.  Accord- 
ing to  Merivale,  Asia  Minor  once  supported  27,000,000  of 
people.  According  to  McCulloch,  they  do  not  now  contain 
more  than  one-fourth  of  those  numbers.  Yet  we  do  not  find 
that  they  have  become  either  unhealthy  or  unfertile"  (Greg). 

It  may  be  said  that  all  this  but  illustrates  the  potent  efficacy 
of  the  preventive  checks.  It  does  more ',  it  shows  that  it  is 
from  those  checks  to  the  growth* of  population,  rather  than  from 
the  growth  itself,  that  we  are  to  fear  the  most  deadly  injuries  to 
society. 

§  66.  In  modern  nations  the  growth  of  numbers — as  oflScially 
ascertained — varies  so  greatly  as  to  set  at  nought  all  attempts  to 
fix  a  general  rate  of  increase.  Nor  can  the  difi'erence  be  traced 
to  the  operation  of  preventive  checks.  In  England  the  popula- 
tion doubles  about  once  in  47  years,  while  the  annual  death-rate 
is  one  in  44.  In  France,  with  the  same  death-rate,  there  is 
hardly  any  increase,  if  not  an  actual  decline.  In  Prussia  the 
increase  is  as  great  as  in  England,  though  the  death-rate  is  one 


62  ELEMENTS   OF   POLITICAL    ECONOMY. 

in  32.  In  the  United  States  and  Lower  Canada — immigration 
being  deducted — the  population  doubles  in  about  40  years.  In 
some  parts  of  Mexico  much  more  rapidly. 

The  population  of  Gaul  in  Roman  times  was  about  ten  and  a 
third  millions  ;  in  the  fourteenth  century  after  Christ  the  king- 
dom of  France,  about  a  third  of  the  present  area,  contained  two 
and  a  half  millions  of  hearths,  or  between  ten  and  eleven 
millions  of  people,  being  32  to  the  kilometre  (something  over 
three-eighths  of  a  square  mile).  In  1515  the  population  was 
actually  less  dense — 30  to  the  kilometre;  in  1599,  34;  in 
1698,  39;  in  1772,  45;  in  1850,  67;  in  1867,  71.4;  in  1872, 
67.3.  The  greatest  rapidity  was  in  the  decade  1816-25,  just 
after  the  Napoleonic  wars,  when  the  annual  increment  was  7|  to 
the  thousand.  By  1848  it  fell  to  about  a  third  of  that  number, 
and  by  1870  it  had  as  good  as  ceased. 

In  England  the  population  is  said  to  have  been  almost 
stationary  under  the  Tudors.  In  six  censuses  taken  during 
the  present  century  beginning  with  1811,  the  rate  of  increase 
was  found  to  be  14,  18,  16,  14,  13  and  12  per  cent,  for 
each  decade.  This  shows  a  diminution  during  and  a  great  in- 
crease following  the  Napoleonic  wars,  as  in  France.  After  that 
the  rate  fell  steadily,  and  should  it  not  cease  to  do  so,  the 
time  will  come  when  England,  like  France,  will  cease  to  add  to 
her  population. 

Ireland  is  often  quoted  by  the  Malthusians.  It  is  alleged 
that  under  the  great  impulse  given  to  Irish  prosperity  during 
the  last  quarter  of  the  eighteenth  century,  her  population 
rose  from  2,690,556  in  1777  to  5,395,456  in  1805.  These 
figures  do  not  rest  upon  any  official  census,  and  may  therefore  be 
questioned.  The  first  is  an  estimate  based  on  the  returns  of  the 
house-tax  ;  the  second  is  the  computation  of  an  individual 
statist.  If  it  be  true,  then  the  population  increased  but  fifty- 
one  per  cent,  in  the  next  thirty-six  years,  rising  to  8,175,141  in 
1841.  The  failure  of  the  potato  crop  under  the  blight  of  a 
single  night,  August  5,  1846,  broke  the  one  staif  of  life  upon 
which  the  Irish  people  leaned,  and  the  famine  of  1847  followed. 


REASON,    AS    WELL    AS    FACTS,   AGAINST    MALTIIUS.      CS 

But  even  at  that  period  Ireland  was  not  as  closely  popuiatud  aa 
England.  There  was  no  necessary  pressure  of  population  on 
subsistence,  for  large  amounts  of  grain  were  raised  for  exporta- 
tion to  England,  and  there  had  been  no  great  want  of  food  at 
home.  By  the  year  1874,  population  had  fallen — chiefly  through 
emigration  to  America — to  5,301,336,  a  decrease  of  37  J  per 
cent. ;  such  a  removal  of  "  the  pressure  on  subsistence  "  ought 
to  have  produced  the  happiest  effects,  if  Malthus  be  right.  But 
Professor  Cairnes,  of  Galway,  wrote  in  1865  :  "  Wo  fail  to  per- 
ceive any  solid  improvement,  scarcely  any  sensible  improvement, 
in  the  present  race  of  daily  laborers  in  Ireland,  as  compared 
with  their  predecessors  twenty  years  ago."  Wages  have  risen, 
but  food  has  risen  equally ;  as  clothing  is  cheaper  their  "  condi- 
tion is  probably  somewhat  better  physically." 

§  67.  There  are  reasons  why  the  Malthusian  theory  cannot 
be  true,  as  well  as  facts  to  show  that  it  is  not. 

It  is  an  ascertained  law  of  nature  that  the  lower  a"y  form  of 
life  stands  in  the  scale  of  existence,  the  greater  the  rate  of  its 
propagation  and  multiplication  ;  the  higher  it  stands  the  less  its 
rate  of  increase.  Vegetables,  as  a  whole,  therefore  surpass  the 
animal  kingdom  as  a  whole.  A  potato  sprout  multiplies  twenty 
fold  in  a  single  year;  a  grain  of  wheat  even  two  hundred  fold 
under  favoring  circumstances.  The  gardener  who  would  make 
a  plant  propagate  freely,  starves  it;  but  he  knows  that  when  by 
care  and  attention  he  has  doubled  its  petals  and  brought  it  to  an 
artificial  perfection,  it  becomes  sterile.  The  wild  rose  of  the 
open  fields  brings  its  seeds  to  perfection  ;  the  rose  of  the  garden 
cannot  be  raised  from  the  seeds  of  its  like. 

So  in  the  animal  kingdom.  The  Clio  horcalis,  of  which  vast 
shoals  furnish  a  mouthful  to  the  whale,  multiplies  by  millions; 
the  whales  themselves  almost  as  slowly  as  man.  The  progeny 
of  a  pair  of  rabbits  in  a  few  years  will  be  reckoned  by  thou- 
sands ;  that  of  a  pair  of  wild  elephants  not  by  dozens,  while 
tame  elephants,  though  well  fed  and  cared  for,  and  living  under 
their  native  skies,  and  allowed  a  large  degree  of  freedom,  cease 
to  breed.  .*^^S^^^^5^ 

^^^^^"^^ 

>*^  OF  THB     '■ 

[HIT  17  BE  SIT  7] 


64  ELEMENTS   OF   POLITICAL   ECONOMY. 

§  68.  Does  not  this  natural  law  continue  in  force  when  we 
compare  the  highest  of  animals  with  the  rest  ?  Why  should  the 
whole  order  of  nature  be  reversed  in  man's  case  ?  The  things 
that  serve  him  as  food,  stand  below  him  in  the  order  of  nature ; 
their  multiplication  must  therefore  be  more  rapid  than  his. 

Not  only  does  the  law  hold  good  as  to  man  in  comparison 
with  the  animals;  it  is  equally  true  of  man  as  compared  with 
man.  The  higher  the  form  of  life,  the  slower  the  rate  of  its 
increase.  Whenever  anj  nation,  or  class  within  a  nation,  have 
attained  to  a  high  degree  of  development  and  culture,  there  is  a 
reduction  of  its  rate  of  propagation,  and  in  many  cases  its 
extinction  begins.  It  is  proverbial  that  men  of  genius  leave  no 
posterity.  In  ancient  Greece  and  Italy  the  extinction  of  rich 
and  privileged  families  went  on  constantly.  Augustus  had  to 
reconstruct  the  Roman  Senate  from  among  the  plebeians,  as 
only  fifty  families  of  senatorial  rank  were  left.  In  France  De 
Tocqueville  could  specify  two  hundred  old  families  in  one  dis- 
trict alone  that  had  become  extinct  from  various  causes  within 
a  century.  Mr.  Greg  ascribes  the  markedly  Gallic  character  of 
the  French  nation  to  the  extinction  of  the  superior  Frankish 
race  who  gave  their  name  to  the  country  and  constituted  its 
feudal  aristocracy.  In  England  few  of  the  Barons  who  took 
part  in  the  Wars  of  the  Eoses  are  still  represented  in  the  Eng- 
lish aristocracy,  and  genuine  pedigrees  rarely  extend  farther 
back  than  the  times  of  the  Tudors.  Of  the  Norman  aristocracy 
who  came  in  with  the  Conqueror,  and  who  were  one  in  forty-two 
of  the  whole  population,  only  a  single  descendant  was  known  in 
David  Hume's  time.  In  spite  of  new  creations,  the  ratio  had 
fallen  to  one  in  eighty-eight  at  the  beginning  of  the  fifteenth 
century,  and  to  one  in  12,500  at  the  beginning  of  the  present 
century.  A  multitude  of  peerages  are  extinct  for  want  of  heirs, 
and  of  1400  baronets  created  between  1611  and  1819,  the 
families  of  783  are  now  extinct.  In  the  United  States, 
although  the  rate  of  increase  is  very  high,  yet  it  is  by  no 
means  universally  so.  In  the  New  England  States,  the  native 
population,    which    in    two    centuries    grew    from   45,000    to 


INCREASE   IN    CLASSES  AND   IN    NA'^IONS.  65 

4,000,000  souls,  is  now  increasing  very  slowly  indeed.  This 
might  be  ascribed  to  the  great  emigration  to  other  parts  of  the 
country,  but  the  observations  founded  upon  the  number  of 
births  to  marriages  shows  this  reason  to  be  not  sufficient.  The 
most  cautious  estimate  makes  the  number  in  the  earlier  periods 
to  have  been  six  children  to  a  marriage ;  in  the  later,  about 
four.  [Franklin  (1751)  says  :  "  Marriages  in  America  are  more 
general,  and  more  generally  early,  than  in  Europe.  And  if  it 
is  reckoned  there  that  there  is  but  one  marriage  per  annum 
among  one  hundred  persons,  perhaps  we  may  here  reckon  two; 
and  if  in  Europe  they  have  but  four  births  to  a  marriage  (many 
of  their  marriages  being  late),  we  may  here  reckon  eight."]  On 
the  other  hand,  the  foreign  population  is  growing  rapidly,  and 
doubtless  will  continue  to  do  so,  until  it  rises  to  the  level  of  the 
native  in  education  and  general  culture.  In  New  York  the 
census  of  1865  showed  that  in  nearly  one-fourth  of  the  families 
of  that  state  no  children  had  been  born,  and  that  in  more  than 
three-fourths  the  average  was  little  over  one  child  to  each 
family. 

It  is  of  course  extremely  probable  that  prudential  considerations  have 
much  to  do  in  these  cases  with  the  avoidance  and  the  postponement 
of  marriage,  and  consequently  with  diminishing  the  increase  of  the 
population.  As  society  grows  in  wealth  and  in  an  exaggerated  respect 
for  wealth  as  an  element  of  social  standing,  young  people  are  less  and 
less  disposed  to  "begin  life  where  their  parents  began  ;  they  must  begin 
where  their  elders  left  off."  The  only  point  of  objection  that  we  would 
raise  to  Mr.  Malthus's  view  of  this  "  moral  check  on  population"  is  that 
such  artificial  and  exaggerated  prudence  is  not  a  beneficent  check  to  a 
wrong  tendency,  but  itself  a  wrong  and  lamentable  habit, — which 
detracts  from  the  health,  the  happiness  and  the  morality  of  the  com- 
munity. 

§  69.  As  of  classes,  so  of  nations.  A  high  degree  of  civili- 
fation  and  mental  culture  imposes  an  immediate  and  natural 
check  upon  the  growth  of  numbers.  The  growth  of  mind  and 
the  growth  of  numbers  are  two  balancing  forces,  two  tendencies 
tliat  counteract  each  other. 

But  the  growth  of  mind  is  a  natural  result  of  the  growth  of 
numbers,  unless  the  constitution  and  course  of  nature  have  been 
5 


QQ  ELEMENTS   OF   POLITICAL   ECONOMY. 

wilfully  or  thoughtlessly  interfered  with  by  a  bad  social 
economy.  There  is  implanted  in  the  nature  of  the  race  a  ten- 
dency to  rise  from  poverty  and  barbarism  to  wealth  and  civili- 
zation. But  this  tendency  has  scope  for  its  exercise  only 
when  man  can  rely  upon  the  help  and  cooperation  of  a  suffi- 
ciently large  body  of  his  fellow-men,  in  the  work  of  subduing 
nature,  and  when  association  and  cooperation  are  not  artificially 
hindered  or  checked.  The  more  people  there  are  in  a  well- 
managed  country — up  to  any  number  that  ever  has  been 
reached  or  is  likely  to  be — the  better  each  man  will  be  fed  and 
clothed,  if  their  industry  be  wisely  directed.  The  more  the 
numbers,  in  that  case,  the  greater  that  people's  mastery  over 
nature,  and  the  larger  the  share  of  the  good  things  that  will 
fall  to  each  individual.  • 

Thus  we  find  that  population  is  self-regulative.  Its  multipli- 
cation brings  the  civilization,  that  is  the  one  efi'ectual  and  all- 
efficient  check  to  all  undue  multiplication.  "  The  excess  of 
fertility  has  rendered  the  process  of  civilization  necessary ;  and 
the  process  of  civilization  must  inevitably  diminish  fertility, 
and  at  last  destroy  its  excess"  (Herbert  Spencer). 

§  70.  Mr.  Doubleday  was  the  first  who  argued  that  a  physio- 
logical reason  or  several  of  them  lay  at  the  root  of  these  facts. 
He  suggested  that  ample  and  sufficient  food  had  directly  the 
efi'ect  of  lowering  the  fecundity  of  the  race.  There  may  be 
truth  in  the  suggestion,  but  it  is  more  probable  that  cerebral 
development  has  that  tendency.  This  seems  to  be  true  even 
of  the  higher  animals,  as  is  seen  in  the  case  of  the  tame 
elephants  of  India.  As  man^s  brain  expands,  the  objects  of 
his  desire  multiply,  and  the  natural  desires  common  to  the 
whole  race  lose  their  prominence  and  despotic  strength.  For  a 
time  they  continue  to  exist  in  an  excessive  and  unnatural  force, 
the  fruit  of  long  ages  of  unrestrained  indulgence, — the  sur- 
vivals of  the  period  of  barbarism.  The  passion  for  alcoholic 
liquors,  for  instance,  may  be  fairly  traced  back  to  ages  when 
drunkenness  formed  the  only  escape  from  a  sordid,  uncultured 
life,  which  admitted  of  no  less  material  exhilaration. 


LENGTHENING    OF   LIFE.  67 

in  this  particular  instance,  the  distribution  of  the  chemical 
elements  of  the  human  frame — phosphorus  espiicially — seems  to 
be  closely  connected  with  the  question.  But  we  may  well  hold 
with  Mr.  Greg  "^  that  other  physiological  causes  of  antifecund 
tendency  are  yet  to  be  discovered ;  and  that  races,  nations  and 
families  would  not  so  often  die  out  were  it  not  so." 

§  71.  By  another  compensatory  law  of  nature,  the  less  the 
rate  of  the  reproduction  of  any  form  of  life,  the  greater  the 
prolongation  of  the  life  of  the  individual  specimen.  What 
nature  produces  with  difficulty,  she  guards  with  care. 

This  law  also  holds  good  between  different  classes  of  men. 
Steadily  for  centuries  past  there  have  been  added  days,  months, 
years  to  the  average  length  of  human  life, — partly  from  occult 
natural  causes,  partly  from  the  growth  of  medical  science  and 
the  adoption  of  wiser  sanitary  and  hygienic  methods.  Thus,  as 
Macaulay  notes,  the  death-rate  in  London  in  any  ordinary  year 
of  the  seventeenth  century  was  greater  than  in  a  bad  chol^^/a 
year  of  the  nineteenth;  and  the  poorest  woman  in  our  times 
can  command  better  medical  attendance  than  the  queens  of  that 
era  could  have  obtained.  The  death-rate  fell  between  1G55  and 
1845  from  one  in  twenty-three  to  one  in  forty,  French  and 
German  statistics  show  that  the  wealthy  and  educated  classes 
live  at  least  a  third  longer  than  the  poor  and  uncultured  classes. 

So  again  it  is  a  mark  of  the  great  advance  of  Christendom,  as 
compared  with  other  groups  of  nations,  that  the  great  epidemics 
no  longer  originate  within  its  borders.  And  since  Christian 
governments  have  taken  measures  to  put  under  sanitary  regu- 
lations, the  vast  Mohammedan  and  Pagan  pilgrimages  and  fes- 
tivals, which  still  breed  pestilences,  it  is  to  be  hoped  they  soon 
will  cease. 

§  12,  Supposing  that  a  bad  social  economy  should  check  a 
people  or  a  large  mass  of  it  in  its  natural  growth  in  civilization 
and  intelligence,  what  would  be  the  effect  on  their  numbers  ? 
That  would  depend  upon  the  vitality  and  elasticity  of  the  stock 
to  which  the  people  belonged. 

(1)  Tn  some  cases,  as  in  the  provinces  under  Mohammedan 
rule,  oppression   seems  to  produce  a  depression  of  spirits  or  of 


68  ELEMENTS    OF    POLITICAL    ECONOMY. 

nervous  energy,  and  thereby  to  exercise  a  singularly  sterilizing 
influence.     The  population  of  a  besieged  city  is  notably  sterile. 

(2)  More  ordinarily,  however,  the  removal  of  the  true  pre- 
ventive checks,  the  growth  of  intellect  and  the  access  of  com- 
fort, tends  to  cause  a  rapid  and  abnormal  increase  of  numbers. 
The  starved  man,  like  the  starved  plant,  propagates  freely. 
Reduce  the  people  to  the  level  of  the  beasts  and  they  will 
multiply  like  the  beasts.  And  so  their  numbers  may  become 
really  excessive,  and  the  mass  of  a  community  sink  ever  deeper 
in  poverty  and  misery.  Such  a  result  may  be  expected  when 
the  wealth  of  a  nation  tends  to  concentrate  in  the  hands  of  a 
few,  instead  of  being  disseminated  throughout  the  whole  people 
in  something  like  equality.  Overpopulation  in  such  a  case  is 
not  the  consequence  of  natural  laws,  but  of  man's  wilful  inter- 
ference with  them. 

§  73.  Man's  history  as  a  producer  of  food  may  be  described 
as  ordinarily  passing  through  three  stages.  In  the  first  he  is  a 
hunter  depending  upon  the  voluntary,  and  therefore  the  scantiest, 
productions  of  the  earth  that  were  fitted  for  his  use.  In  the 
second  he  is  a  shepherd,  who  has  mastered  the  services  of  that 
division  of  nature  which  meets  his  wants  with  most  directness 
and  least  labor  3  but  he  is  compelled  to  migrate  with  his  tribe 
when  they  seek  new  pastures,  and  he  has  no  rights  and  no  safety 
save  as  a  member  of  it.  In  the  third  he  is  a  tiller  of  the  soil, 
a  member  of  a  body  politic,  possessed  of  a  fixed  home.  He 
makes  an  acre  produce  as  much  food  as  hundreds  did  in  the 
first  stage,  or  tens  in  the  second.  He  is  able  to  act  in  greater 
independence  of  other  men;  able  also  to  associate  more  closely 
with  them.  The  societary  circulation  moves  more  rapidly  and 
consequently  more  forcefully.  The  resistance  of  nature  dimin- 
ishing, the  pressure  of  population  upon  the  means  of  subsistence, 
which  was  very  great  in  the  first  stage,  and  great  still  in  the 
second,  in  large  measure  disappears.  It  was  that  very 
pressure  that  overcame  the  natural  inertia  of  man  and  forced 
him  to  press  forward.  "  For  his  sake  '^  the  earth  was  accursed 
to  be  the  home  of  briers,  thorns  and  thistles,  that  difficulties 
might  develop  his  power  as  the  earth's  appointed  master. 


"THE   MORE  THE   MERRIER."  69 

§  74.  Man's  *'  power  over  nature"  continues  to  grow  with 
every  advance  in  the  compactness  of  society.  Men  obtain  the 
use  of  more  iron  and  coal,  houses  and  ships,  wool  and  cotton,  in 
return  for  less  labor,  as  society  advances.  When  the  density  of 
population  made  it  worth  while  to  carry  the  water  in  pipes 
through  the  streets  of  our  city,  it  was  obtained  with  far  less 
outlay  of  labor  than  when  every  man  carried  his  bucket  to  tlie 
river's  bank,  or  even  to  the  pump,  whose  erection  also  marked  a 
stage  in  social  development.  So  when  through  the  growth  of 
population  it  becomes  "  worth  while  "  to  sink  a  shaft  to  the  coal- 
bed,  it  is  no  longer  necessary  to  waste  wood  as  fuel  and  spend 
labor  in  chopping  it,  and  the  time  saved  can  be  spent  in  turning 
the  trees  into  lumber  or  some  other  profitable  work.  Till  the 
grist-mill  is  erected  the  labor  of  a  thousand  arms  is  expended  in 
grinding  grain  ;  the  work  then  becomes  the  business  of  a  few 
persons,  and  the  rest  have  the  more  time  for  better  work  than 
turning  hand-mills  or  pounding  the  wheat  in  querns.  And  these 
are  but  specimen  facts  that  represent  the  whole  movement  of 
society. 

<'  From  the  beginning,"  says  Herbert  Spencer,  "  the  pressure 
of  population  has  been  the  proximate  cause  of  progress.  It 
produced  the  original  diffusion  of  the  race.  It  compelled  men 
to  abandon  predatory  habits  and  take  to  agriculture.  It  led  to 
the  clearing  of  the  earth's  surface.  It  forced  men  into  the 
social  state ;  made  social  organization  inevitable ;  and  has 
developed  the  social  sentiments.  It  has  stimulated  to  progressive 
improvements  in  production,  and  to  increased  skill  and  intelli- 
gence. It  is  daily  thrusting  us  into  closer  contact  and  more 
mutually  dependent  relationships.  After  having  caused,  as  it 
ultimately  must,  the  due  peopling  of  the  globe,  and  the  raising 
of  all  its  habitable  parts  into  the  highest  state  of  culture ;  after 
having  brought  all  processes  for  the  satisfaction  of  human  wants 
to  perfection;  after  having  at  the  same  time  developed  the 
intellect  into  complete  competency  for  its  work  and  the  feelings 
into  complete  fitness  for  social  life, — the  pressure  cf  population 
must  gradually  bring  itself  to  an  end." 


CHAPTER  FIFTH. 
The  National  Economy  of  Land. 

§  75.  We  have  defined  a  nation  as  a  people  occupying  a  con- 
tinuous area,  and  owning  this  in  a  more  eminent  sense  than  any 
part  of  it  is  owned  by  any  of  its  citizens.  Its  stewardship  of 
the  economic  interests  of  its  people  extends  to  the  general  over- 
sight of  their  rural  economy,  and  calls  for  the  careful  removal 
of  all  obstacles — especially  those  of  a  legal  kind — to  its  improve- 
ment and  that  of  the  people  engaged  in  it;  and  also  for  the 
adoption  of  such  measures  of  improvement  as  are  not  easily 
attainable  by  individual  action.  It  may  justly  be  said  that  this  is 
true  of  the  duty  of  the  state  towards  any  form  of  industry ;  but 
from  the  peculiar  relation  of  agriculture  to  the  very  existence  of 
the  nation,  the  state  stands  in  a  relation  of  far  greater  responsi- 
bility here.  Many  of  those  who  most  incline  to  exclude  the 
state  from  all  activity  in  the  sphere  of  industrial  interests,  are 
quite  ready  to  admit  that  where  motives  of  public  policy  call 
for  interference,  the  landowner  may  fairly  be  treated  as  the 
trustee  or  steward  of  the  national  property,  not  in  any  absolute 
sense  the  owner. 

§  76.  What  was  said  in  the  preceding  chapter  of  the  general 
advance  of  industrial  methods  through  the  growth  of  numbers 
and  of  the  resulting  power  of  cooperation,  is  eminently  true  of 
agriculture.  As  time  advances,  larger  crops  are  reaped  at  a  less 
cost  upon  lands  that  were  early  occupied,  and  those  that  were 
previously  inaccessible  to  tillage,  are  cleared  or  drained.  A  larger 
amount  of  labor  and  capital  becomes  available,  and  can  be  ex- 
pended with  perfect  safety  upon  the  same  field,  as  the  crops  are 
increased  in  still  greater  ratio.  Especially  the  division  of  labor 
contributes  to  this.  The  early  agriculturist  was  "Jack  of  all 
trades  and  master  of  none."  His  house,  his  clothing,  his  rude 
tools,  everything  that  he  had,  was  his  own  workmanship.  But 
when  these  are  produced  for  him  by  skilled  artisans,  who  set 
70 


EXTENSIVE   TILLAGE. — MEDIAEVAL    ENGLAND.  Tl 

him  at  leisure  to  do  his  farm-work  better,  he  obtains  all  these 
thinc;s  at  a  less  outlay  of  labor,  and  of  much  improved  quality. 

§  77.  Early  agriculture  was  extensive  in  its  method  ;  that  is, 
it  expended  a  small  capital  upon  a  large  surface.  Just  as  the 
hunter  required  a  larger  area  than  the  shepherd,  and  tRe  shep- 
herd more  than  the  farmer,  so  the  bad  and  imperfect  agriculture 
of  a  poor  half-savage  age,  required  a  larger  area  than  when 
methods  of  tillage  arc  highly  improved  and  the  capital  at  the 
command  of  the  farmer  has  increased.  Thus  we  find  half-bar- 
barous peoples  in  earlier  times  driven  by  famine  from  lands  that 
DOW  sustain  a  dense  population. 

English  agriculture  in  the  middle  ages  is  a  case  in  point.  As 
much  of  the  land  as  is  now  under  wheat  was  taken  up  in  raising 
as  much  food  as  would  now  sufl&ce  for  a  million  and  a  half  of 
persons.  The  population  was  something  between  that  number 
and  two  and  a  half  millions;  yet  nearly  the  whole  people  were 
employed  in  producing  food;  even  the  townsmen  poured  out 
into  the  country  to  help  to  gather  in  the  harvest,  and  the  Long 
Vacation  at  the  Universities  was  established  that  their  thirty 
thousand  students  might  go  home  to  assist.  As  much  seed  was 
sown  to  the  acre  as  at  present,  but  the  average  yield  was 
only  above  one-fourth  what  it  is  now.  Yet  the  climate  of 
England,  as  of  all  Northern  Europe,  was  warmer  than  it  now  i.s. 
Grapes  grew  plentifully  in  the  open  air,  and  wine  was  made  that 
compared  with  those  of  France.  "  The  land  was  imperfectly 
drained ;  the  working  of  the  soil  was  shallow ;  the  manures 
employed  were  limited  "  to  such  as  were  ready  at  hand,  at  a  time 
when  the  Flemish  farmers  imported  English  marl.  "  Scanty  as 
the  crop  was,  it  seems  to  have  been  very  exhausting,  for  half 
the  land,  in  ordinary  cases,  lay  fallow.  .  .  Such  crops  as  were 
obtained,  were  not  procured  without  large  relative  expenditure." 
The  agricultural  implements  were  of  the  poorest ;  the  plough  was 
a  ponderous  structure  of  wood  and  iron,  which  it  took  four  horses 
to  drag  over,  rather  than  through,  the  soil.  Metal  was  so  scarce, 
being  mostly  imported  from  Normandy,  that  the  wear  and  tear 
of  plough-iron  in  a  dry  season  was  a  large  item  in  the  farm  budget. 


72  ELEMENTS   OF   POLITICAL    ECONOMY. 

As  little  hay  and  no  green  crops  were  raised,  the  sheep  were 
mostly  killed  at  Martinmas;  and  such  as  were  left,  with  the 
oxen,  starved  through  the  winter,  so  that  improvement  of  stock 
was  impossible.  As  late  as  1547,  bullocks  bought  for  the  navy 
weighed  less  than  400  pounds.  Few  garden-vegetables  were 
"cultivated,  and  down  to  the  reign  of  Elizabeth,  they  were 
imported  for  the  tables  of  the  rich  from  the  Continent.  This 
want  and  the  general  use  of  salt  food  spread  scurvy  and  evea 
leprosy  among  the  people. 

See  Prof.  Thorold  Rogers's  History  of  Agriculture  and  Prices  in  Eng' 
land,  voL  i. 

§  78.  Later  agriculture  is  intensive ;  that  is,  it  expends  a 
large  capital  upon  a  small  surface.  It  finds  at  its  hand  sources 
of  wealth  that  tax  all  its  resources  for  their  mastery,  but  more 
than  repay  the  larger  outlay.  It  goes  down  to  the  sub-soil, 
instead  of  spreading  over  the  top-soil  of  new  fields  ;  it  finds  a 
new  farm  under  the  old  one.  It  gives  up  methods  of  rotation 
in  which  the  land  lay  fallow,  and  adopts  a  new  one,  in  which, 
through  generous  returns  to  the  soil,  it  yields  two  crops  a  year. 
It  multiplies  the  number  of  live-stock  on  a  farm,  and  feeds  them 
generously  and  under  shelter,  that  it  may  obtain  the  means  to 
overcome  the  natural  barrenness  of  the  soil  or  multiply  its  fer- 
tility. It  masters  the  coldness  and  heaviness  of  clayey  or  low- 
lying  soils  by  artificial  drainage,  so  that  the  crop  in  harvest  is 
advanced  by  weeks  and  the  peril  of  the  autumnal  rains  avoided. 
It  offers  the  highest  premium  for  improvements  in  live-stock, 
seeds  and  implements.  '*  Many  of  these  agricultural  practices 
are  only  possible  where  there  is  a  large  agricultural  population  ; 
for  which,  on  the  other  hand,  work  is  found  by  these  very 
practices"  (Laveleye). 

§  79.  While  the  finest  results  in  agriculture  are  achieved  (as 
in  parts  of  Saxony)  by  the  outlay  of  a  large  capital,  directed  by 
large  intelligence,  upon  a  considerable  area  of  land, — yet,  with 
the  actual  human  material  engaged  in  farming,  and  in  the  exist- 
ing state  of  its  intelligence,  the  best  results,  on  the  whole,  are 
had  where  the  farms  are  small  and  especially  where  they  are 
owned  by  the  actual  cultivators.     Progress  towards  the  sub- 


LARGE    AND    SMALL    FARMS    IN    ANTIQUITY.  73 

division  of  the  land — up  to  a  certain  limit — is  a  gain  to  agri- 
culture.    The  opposite  is  a  retrogression. 

This  fact  was  known  even  to  the  ancients.  Solomon  seems  to 
refer  to  it  when  he  says  :  "  Much  food  is  in  the  tillage  of  the 
poor;"  and  the  Mosaic  law  forbade  the  permanent  alienation  of 
lands  after  their  distribution  among  the  people.  But  the  law 
was  evaded  or  ignored  in  the  eagerness  to  form  great  estates; 
and  Isaiah  denounces  a  woe  upon  ''  them  that  join  house  to 
house  and  field  to  field,  till  there  be  no  place,  that  they  may  be 
placed  alone  in  the  midst  of  the  land,"  and  the  woe  is  the  deso- 
lation of  the  land  and  the  reduction  of  its  average  yield  of  food 
for  man  (V.  8-10). 

Under  Roman  rule  in  Italy  the  small  holdings  were  swallowed 
up  in  the  great  estates  of  the  aristocracy,  in  spite  of  the  efforts 
of  the  Gracchi  to  preserve  the  patrimony  of  the  poor.  The  first 
step  seems  to  have  been  the  enclosure  (possessio)  of  the  common 
lands  (ager  publicus)  upon  which  the  common  people  depended 
for  grazing,  and  which  were  absolutely  necessary  to.  their  methods 
of  agriculture.  (The  same  process  was  arrested  in  Attica  by 
the  laws  of  Solon,  but  was  carried  out  in  Lacedaemon.)  Pliny 
tells  us  the  result :  "  Large  estates  have  been  the  ruin  of  Italy 
{Latifandia  perdidere  Italiam)^  The  peninsula  declined  stea- 
dily in  all  the  elements  of  wealth  and  production.  The  emperors 
had  to  obtain  from  Africa  and  Egypt  the  wheat  that  fed  the 
Roman  populace.  The  incursions  of  the  barbarians  led  to  the 
breaking  up  and  redistribution  of  these  monstrous  estates,  and 
Italy  was  able  to  feed  her  own  children  again. 

§  80.  In  the  kingdoms  of  Western  Europe  only  England  and 
Spain  have  repeated  the  experience  of  ancient  Italy,  and  only 
the  former  persists  in  the  policy  that  led  to  it. 

In  these  kingdoms  (as  in  most,  perhaps  in  all,  countries  in  the 
earliest  stage  of  society),  the  land  was  at  first  held,  not  by  indi- 
vidual owners  "  in  several!,"  but  by  bodies  of  freemen  associated 
in  a  village  community.  Their  land  or  mark  lay,  as  it  were,  in 
two  coucentrlc  circles  around  the  village  or  thorp.  The  outer 
and  broader  was  the  folk-land  or  common  on  which  their  cattle 


74  ELEMENTS   OF    POLITICAL   ECONOMY. 

mostly  grazed.  The  inner  circle  of  lands  tl.at  lay  next  the  thorp 
was  divided  into  three  fields,  in  each  of  which  every  marksman 
had  a  share,  but  the  whole  was  cultivated  in  common  by  custom- 
ary methods  and  under  a  rotation  of  crops  that  left  one  field 
fallow  and  under  pasture  each  year.  In  the"  thorp  itself  every 
man's  house  and  courtyard  were  his  personal  possessions;  here 
community  gives  way  to  immunity. 

Gradually  the  equality  of  the  marksmen  in  possession  and 
dignity  gave  way  to  a  more  aristocratic  constitution  of  society. 
A  manor-house,  often  a  castle,  rose  above  its  humbler  neighbors, 
and  a  lion's  share  of  the  mark  fell  to  the  lord  of  the  manor,  while 
upon  the  inferior  marksmen  devolved  the  duty  of  cultivating 
these  demesne  lands  as  well  as  their  own.  A  social  revolution, 
like  the  Norman  Conquest  of  England,  brought  in  a  new  lord 
of  the  manor,  but  added  to,  instead  of  removing  the  burdens  of 
the  people.  The  bulk  of  them  latterly  became  villeins,  as  tenants 
who  paid  for  their  lands  in  the  form  of  customary  services  in  till- 
ing the  lands  of  their  lord  a  certain  part  of  their  time.  The  value 
of  this  labor  was  so  trifling  that  the  lord  was  quite  willing  to 
commute  the  service  for  a  money-payment,  so  that  villeins  be- 
came copyhold  tenants  at  a  fixed  rent.  With  the  progress  of 
society,  labor  rose  in  value  and  produce  fell,  through  the  former 
becoming  more  productive.  The  people  grew  richer;  the  lords 
of  the  manors  poorer.  From  tenants  the  farmers  became  free- 
holders, for  if  the  lord  wanted  money,  the  price  of  broad  acres 
would  be  readily  forthcoming  from  some  old  stocking  hid  away 
in  the  thatch-roof.  "  There  can  be  no  doubt  that  the  lands  of  the 
feudal  lords  were  largely  alienated  in  small  parcels.  Many  causes 
contributed  to  this  result'^  (Thorold  Rogers).  The  masters 
row  sought — <?specially  after  the  enormous  reduction  in  the 
labor-supply  by  the  black  death, — to  cancel  these  contracts  and 
reduce  their  tenants  to  villeinage,  requiring  at  their  hands  the 
old  services.  Fortunately  for  the  latter,  the  principle  of  custom 
or  usage  was  all-powerful  in  that  early  age.  In  the  absence  of 
large  intelligence  and  intellectual  freedom,  every  established 
usage  was  treated  as  having  the  strongest  prescriptive  right. 


THE    ENGLISH    ENCLOSURE    LAWS.  75 

The  custom  that  fixed  the  form  and  amount  of  the  tenant's  rent 
was  as  valid  as  that  by  which  the  lord  held  his  estates.  The 
people  rose  in  Wat  Tyler's  insurrection  against  the  innovation, 
and  the  aristocracy,  although  successful  in  putting  them  down, 
relinquished  their  claim  rather  than  provoke  another  such  rebel- 
lion on  conservative  principles. 

§  81.  An  indirect  way  of  stopping  this  reconquest  of  the 
land  by  the  people  was  found  in  the  enclosure  acts,  of  which 
the  first  was  the  famous  Statute  of  Merton  (temp.  Henry  III). 
By  the  provisions  of  these  the  aristocracy  were  authorized  to  en- 
close such  parts  of  the  outlying  folk-land  as  wore  not  necessary 
for  the  use  of  the  tenants  and  freeholders  of  the  manor.  By 
others  passed  at  a  later  date  the  enclosure  of  demesne  lands 
lying  in  the  fields  of  the  mark  itself,  and  consequently  the 
breaking  up  of  the  old  system  of  tillage,  was  allowed.  This  last 
measure,  which  involved  a  complete  revolution  in  the  rural 
economy  of  the  country,  was  consummated  by  the  sixteenth 
centilry.  It  was  one  that  must  have  been  adopted  sooner  or 
later.  The  old  system  of  communistic  land  tenure  imposed 
burdensome  checks  upon  industry  and  enterprise;  it  held  back 
the  farmer  from  adopting  any  but  customary  or  traditional 
methods  of  tillage;  it  took  away  some. of  the  strongest  in- 
centives to  industry.  After  its  abolition,  although  the  large 
landowners  turned  a  large  part  of  their  enclosed  lands  into 
pasturage,  to  avoid  paying  what  seemed  to  them  the  extravagant 
wages  then  asked,  yet  such  was  the  improvement  in  methods  of 
tillage  that  there  was  an  increase  in  the  entire  production  of 
wheat. 

But  this  "  dissolution  of  the  ancient  copartnership  in  the  use 
nf  the  soil,  and  the  establishment  of  separate  and  independent 
farms  in  its  stead,"  called  for  the  most  scrupulous  and  careful 
adjustment  of  rival  claims  both  in  the  laws  and  in  their  interpre 
tatjons.  Instead  of  this  we  have  loosely  worded  statutes,  passed 
by  Parliaments  in  which  the  landed  interest  was  supreme,  and 
interpreted  by  subservient  and  corrupt  judges.  Sir  Thomas 
More,  an    exception  that   did  honor  to  the    bench,  tells    us  of 


76  ELEMENTS   OF   POLITICAL   ECONOMY. 

*^  husbandmen  thrust  out  of  their  own  ;  or  else  by  covin  and 
fraud,  or  violent  oppression,  put  beside  it ;  or  by  wrongs  and 
injuries  so  wearied  that  they  be  compelled  to  sell  all."  Vastly 
disproportionate  shares  of  the  common  grazing  lands  were  en- 
closed ;  parts  of  the  three  fields  to  which  the  lord  had  no  claim 
were  taken  in  with  his  demesne  lands.  Even  when  the  farmer 
was  not  dispossessed  of  his  plough-land  by  force  or  fraud,  he 
was  often  broken  in  spirit  and  in  fortune  by  the  enclosure  of 
the  commons,  and  sank  into  the  rank  of  a  day-laborer.  "  The 
peasantry  lost  not  only  the  benefits  derived  from  the  right  of 
common  over  the  greater  part  of  England,  but  that  loss  involved 
in  numerous  cases  the  loss  of  their  separate  fields.  They  had 
lived  upon  the  produce  of  the  two,  and  their  husbandry  was 
based  on  it." 

§  82.  The  dissolution  of  the  monasteries,  and  the  distribution 
of  the  church  lands  among  the  new  aristocracy  created  by  the 
Tudors,  added  to  the  misery  of  the  people.  The  new  owners 
treated  tenants  and  freeholders  as  possessed  of  no  rights  in  the 
land.  The  outcry  of  the  people  could  not  be  stifled  ;  it  forced 
the  Protector  Somerset  to  appoint  a  commission  of  inquiry,  which 
reported  that  the  charge  of  wholesale  and  general  injustice  was 
fully  substantiated  by  the  evidence ;  but  they  could  suggest  no 
remedy.  From  this  period  we  begin  to  hear  of  a  "  dangerous 
class  "  in  the  alleys  and  back  streets  of  English  cities,  where 
disbanded  monks  and  broken  agriculturists  congregated.  The 
yeoman  class,  which  had  been  and  still  was  the  strength  of  the 
nation,  in  peace  and  war,  at  home  and  abroad,  in  church  and 
state,  was  greatly  reduced  in  numbers  and  weight,  and  oppressed 
by  rack-rents.  "  My  father,"  says  Bishop  Hugh  Latimer,  "  was 
a  yeoman  and  had  no  lands  of  his  own  ;  only  he  had  a  farm  of 
three  or  four  pounds  by  the  year  at  the  uttermost,  and  here- 
upon he  tilled  so  much  as  kept  half  a  dozen  men.  He  had 
walk  for  a  hundred  sheep,  and  my  mother  milked  thirty  kijie. 
He  was  able  and  did  find  the  King  a  harness  with  himself  and 
his  horse  while  he  came  to  the  place  where  he  should  receive 
the  King's  wages.     I  can  remember  that  I  buckled  his  harness 


THE   STRUGGLE   OF   THE   YEOMANRY.  77 

when  he  went  unto  Blackheath  field  [in  1497].  II»!  kept  nie  tc 
school,  or  else  I  had  not  been  able  to  have  preached  before  the 
King's  majesty  now  [in  1549].  lie  married  my  [six]  sisters 
with  five  pounds  (or  twenty  nobles)  apiece,  so  [besides]  that  he 
brought  them  up  in  the  fear  of  God.  .  .  .  He  kept  hospitality 
for  his  poor  neighbors.  And  some  alms  he  gave  to  the  poor. 
And  all  this  did  he  off  the  said  farm,  where  he  that  now  hath  it 
payeth  sixteen  pound  by  the  year  or  more,  and  is  not  able  to  do 
anything  for  his  Prince,  nor' for  his  children,  or  give  up  a  cup 
of  drink  to  the  poor." 

§  83.  Under  the  kings  of  the  house  of  Stuart  and  under  the 
Commonwealth,  the  yeoman  class  rallied  as  to  numbers  and 
weight  in  the  nation.  We  find  patriotic  writers  boasting  of 
them  as  the  glory  of  England  and  the  terror  of  France.  Lord 
Chancellor  Coke  speaks  of  one-third  of  England  as  held  in 
copyhold,  i.  e.,  at  rents  incapable  of  being  raised  above  the  rates 
specified  in  the  copy  or  roll  of  the  manor.  *'  Now  copyholders," 
he  says,  "stand  upon  sure  ground  j  now  they  weigh  not  their 
lord's  displeasure;  they  shake  not  at  every  blast  of  wind;  only 
having  an  especial  care  of  the  main  chance,  namely,  to  perform 
exactly  what  services  their  tenure  doth  exact, — then  let  the  lord 
frown,  the  copyholder  cares  not,  knowing  himself  safe."  Lord 
Maeaulay  estimates  the  landowners  in  1660  at  160,000,  and  as 
forming  with  their  families  one-seventh  of  the  population.  At 
that  time  all  copyhold  and  similar  tenures  were  converted  into 
soccage  tenures  by  being  placed  under  the  jurisdiction  of  the 
king's  courts.  Down  to  the  middle  of  the  eighteenth  century 
the  distribution  of  the  land  among  small  holders  and  owners 
was  going  on  without^nterruption,  but  at  that  date  it  ceased, 
the  tendency  to  concentration  took  its  place.  The  subsequent 
history  of  English  land  tenure  is  a  record  of  the  enclosure  of 
the  commons  without  regard  to  the  rights  of  the  poor, — of  the 
absorption  of  small  holdings  in  great  farms  without  regard  to 
customary  tenure,  and  of  the  extinction  of  the  yeoman  class 
without  regard  to  the  nation's  higher  interests.  Between  1701 
and  1867  one-third  of  the  farmed  and  pasture  lands  of  England 


78  ELEMENTS   OF   POLITICAL   ECONOMY. 

were  enclosed  by  the  rich,  often   by  means  of  money  loaned 
them  by  the  state  for  the  purpose. 

Leases  are  become  exceptional^  being  rarer  for  nine  years  than 
in  the  Middle  Ages  for  ninety.  Much  of  the  land  is  held  at 
rack-rent;  that  is,  the  highest  price  that  can  be  got  in  the  open 
market.  The  great  mass  of  it  is  gathered  into  large  estates, 
which  grow  in  bulk,  while  the  number  of  landowners  is  small 
and  diminishing.  Very  little  of  it  comes  into  the  market,  and 
that  is  sold  '^at  fancy  prices"  to  rich  men  who  can  afford  a 
country-seat.  The  working  classes  have  become  more  and  more 
wretched  and  dependent;  all  sense  of  any  relationship,  other 
than  that  formed  by  the  payment  and  receipt  of  wages,  is  now 
lost  by  both  the  landowner  and  the  people  on  his  estate.  "In 
fact,  there  is  no  longer  a  true  rural  population  remaining,  for  the 
ends,  political,  social  and  economical,  that  such  a  population 
ought  to  fulfil.  The  landed  yeomanry,  insignificant  in  number, 
and  a  nullity  in  political  power,  are  steadily  disappearing  alto- 
gether. The  tenant  farmers  have  lost  the  security  of  tenure, 
the  political  independence,  the  prospect  of  one  day  farming 
their  own  lands,  which  they  formerly  enjoyed.  And  lastly,  the 
inferior  peasantry  not  only  have  lost  ground  in  the  literal  sense, 
and  have  rarely  any  other  connection  with  the  ground  than  a 
pauper's  claim,  but  have  sunk  deplorably  in  other  economical 
respects  below  their  condition  in  former  centuries.  Thus  a  soil 
eminently  adapted  by  natural  gifts  to  sustain  a  numerous  and 
flourishing  population  of  every  grade,  has  almost  the  thinnest 
and  absolutely  the  most  joyless  peasantry  in  the  civilized 
world."  ..."  Once,  from  the  meanest  peasant  to  the  greatest 
noble,  all  had  land,  and  he  who  had  leasf  might  hope  for  more; 
now  there  is  being  taken  away  from  him  who  has  little,  even 
that  which  he  has — his  cottage,  nay,  his  Separate  room.  Once 
there  was  an  ascending  movement  from  the  lowest  grade  to  the 
highest ;  now  there  is  a  descending  movement  in  every  grade 
below  the  highest." 

See  Cliffe   Leslie's   Land  Syatema   of  Ireland,   England  and   the    Con- 
tineni. 


"a  bad  reason  is  better  tuan  none."    79 

§  84.  Attempts  are  made  to  explain  th  s  state  of  affairs  by 
ascribing  it  to  the  operation  of  causes  that  were  equally  and 
even  more  vigorously  in  action  when  the  tendency  was  to  the 
division  and  distribution  of  the  land.  Thus  some  ascribe  it 
vaguely  to  the  perpetuation  of  the  feudal  system  and  its  land 
tenure  in  England.  We  have  seen  how  the  customary  tenures 
of  that  system  operated  most  powerfully  to  the  advancement  of 
the  people  at  the  expense  of  their  lords.  We  have  also  seen 
how  those  forms  of  tenure*  with  their  half-defined  and  therefore 
objectionable  rights,  were  finally  expunged  from  English  law  at 
the  Restoration.  And  in  fact  the  best  landlords  in  England  are 
those  that  retain  under  the  new  forms  something  of  the  old 
spirit  that  made  feudalism  endurable, — to  wit,  the  sense  of  a 
personal  relationship  between  higher  and  lower,  and  the  sense 
of  a  duty  to  the  land.  Their  tenants  have  security  without 
leases,  for  they  know  that  no  unfair  advantage  will  be  taken  of 
them.  As  they  sometimes  express  it,  their  confidence  in  the 
family  is  as  good  as  a  lease. 

Others  ascribe  the  mischiefs  of  the  system  to  the  right  of 
primogeniture,  by  which  the  whole  estate  passes  to  the  eldest 
son,  to  the  exclusion  of  his  brothers  and  sisters.  This  no  doubt 
is  a  mischievous  rule,  but  it  is  one  that  tends  to  keep  large 
estates  undivided  rather  than  to  lead  to  the  absorption  of  the 
small  ones.  No  doubt  it  has  the  latter  effect  in  an  indirect  way, 
by  leaving  large  sums  in  the  hands  of  the  landowners  to  buy  up 
these  latter.  But  this  right  is  not  an  invention  of  this  century 
or  of  the  last  j  it  was  in  full  operation  long  before  the  decline 
of  the  English  yeomanry  began. 

Others  urge  the  want  of  a  proper  system  for  the  registration 
and  transfer  of  land  titles.  This  also  is  a  grave  mischief,  but  it 
is  one  of  much  longer  standing  than  the  mischief  for  which  it 
is  to  account.  It  has  not  kept  the  rich  from  buying  up  the 
estates  of  poorer  men. 

§  85.  The  true  cause,  as  Coleridge  pointed  out,  is  the  im- 
portation of  purely  commercial  maxims  into  the  rural  economy 
of  England.  The  trading  spirit  attained  in  England  the  as- 
cendancy it  has  ever  since  possessed,  about  the  time  when  the 


80  ELEMENTS    OF   POLITICAL   ECONOMY. 

separation  of  the  mass  of  the  English  people  from  the  soil 
fairly  began,  viz. :  the  middle  of  last  century.  English  political 
economy  from  Adam  Smith  down,  with  some  notable  exceptions; 
has  been  the  exponent  and  the  justification  of  that  spirit.  It 
has  shaped  public  opinion,  controlled  the  tenor  of  legislation, 
and  controlled  the  direction  of  the  industry  of  all  classes.  It 
has  stripped  the  landlord  of  all  notions  of  stewardship  for  the 
nation  and  duty  owed  to  the  land  and  the  people  who  till  it.  It 
has  led  men  to  regard  the  production  and  cheapening  of  com- 
modities as  the  one  great  end  of  all  activity.  It  has  sacrificed 
men  and  their  personal  interests  to  things. 

Now  in  trade  the  law  of  parsimony  is  the  supreme  law.  For 
trade  aims  at  getting  as  large  and  as  quick  returns  as  possible, 
with  the  least  possible  expense  in  managing  and  collecting  these. 
Trade  can  make  no  distinction  between  persons  and  things;  it  is 
(in  a  low  sense)  no  respecter  of  persons.  It  sets  aside  the  dearest 
friend  or  the  worthiest  object  of  pity,  and  takes  the  off"er  of  the 
man  who  bids  highest  and  ofi'ers  the  best  security.  Other 
things  being  equal,  it  prefers  the  largest  purchaser  to  any  other, 
and  even  abates  the  price  in  his  favor;  for  the  ultimate  object 
being  to  get  wealth  enough  to  be  rid  of  the  trouble  of  getting 
it,  the  offer  that  involves  least  trouble  is  the  best. 

Apply  these  maxims  to  the  management  of  an  estate,  and  the 
problem  becomes  one  of  getting  the  largest  returns  with  the 
least  outlay  in  wages  and  food.  All  question  of  the  well-being 
of  the  small  farmer  and  the  laborer  is  lost  sight  of.  The  hold- 
ing of  the  former  was  taken  in  with  other  lands  to  make  large 
farms,  that  the  landlord  might  have  fewer  tenants  to  deal  with 
and  less  trouble  about  his  rents.  The  latter  were  systematically 
and  designedly  brought  into  a  position  of  dependence,  because 
they  were  thus  the  more  easily  managed.  Their  cottages  and 
gardens,  for  instance,  were  let  to  the  tenant-farmer  with  the 
understanding  that  he  would  see  to  repairs,  and  then  the  XJOt- 
tages  were  re-let  by  him  without  the  gardens,  that  their  sole 
dependence  might  be  their  wages.  The  wages-roll  was  cut  down 
to  the  utmost,  because  the  less  labor  the  less  expense ;  the 
majority  of  those  who  had  lived  by  the  land  were  driven  to  the 


THE   **  SCIENCE    FOR   WEALTH."  81 

cities,  and  only  a  fraction  of  the  people  of  England  now  live 
by  agriculture. 

See  Coleridge's  Works;  VI,  215-25  (Aracr.  Edition). 
Did  the  English  economists  raise  their  voices  in  protest, 
when  the  highest  interests  of  the  nation  were  thus  imperilled  ? 
They  said :  "  We  have  nothing  to  do  with  those  moral  and 
political  questions;  we  have  no  advice  to  offer.  Only  be  it 
known  to  you  that  additional  labor  employed  in  manufactures  is 
more^  when  employed  in  agriculture  is  less  efficient  in  propor- 
tion "  They  left  men  to  draw  the  inference  that  it  was  a 
national  advantage  when  labor  was  withdrawn  from  work  where 
it  could  not  be  effectively  concentrated,  and  transferred  to  the 
cities  and  factories  where  it  could.  Furthermore  they  furnished 
them  with  the  factory  system  for  application  to  tillage, — the 
capitalist  furnishing  the  means,  and  the  actual  worker  on  the 
land  being  reduced  to  the  rank  of  a  day-laborer.  They  applied 
to  farming  ^'  the  machinery  doctrine  of  most  produce  from  least 
labor,"  which  is  "  the  doctrine  of  starvation  to  the  laborer,  and 
dispossession  to  the  small  proprietor,  and  instead  of  belonging  to 
the  advance  of  knowledge  is  a  retrogression"  (Wren  Hoskyns, 
M.  P.). 

"  Political  writers  and  speakers  of  this  school  have  long  enjoyed  the 
double  satisfaction  of  beholding  in  themselves  the  masters  of  a  difficult 
study,  and  of  pleasing  'the  powers  that  be*  by  lending  the  sanction  of 
'science'  to  all  established  institutions  and  customs,  unless,  indeed,  the 
customs  of  the  poor.  Instead  of  a  science  of  wealth,  they  give  us  a 
science  for  wealth."  (Cliffe  Leslie.) 

§  86.  The  system  may  be  a  failure  socially  and  politically ; 
but  the  chief  question  for  us  here  is — Is  it  an  economic  success 
or  a  failure  ?  A  study  of  its  general  features  and  a  comparison 
with  what  we  find  in  other  countries  leaves  no  doubt  that,  in 
spite  of  brilliant  successes  in  many  matters  of  detail,  English 
rural  economy  is,  on  the  whole,  a  failure,  when  regarded  from  an 
economic  point  of  view. 

(a)  It  has  failed  by  displaying  a  lack  of  aggressive  power.  It 
has  gathered  up  into  large  farms  the  areas  previously  cleared 
and  brought  under  cultivation  by  the  small  farmers  of  the  past; 
6 


82  ELEMENTS    OF    POLITICAL   ECONOMY. 

it  has  in  some  degree  improved  upon  their  methods.  But  il 
has  no5  evinced  any  ability  to  cope  with  and  bring  under  tillage 
the  vast  area  of  English  soil  that  still  lies  in  a  state  of  nature. 
A  committee  of  the  House  of  Lords  of  the  session  of  1873, 
after  a  searching  investigation,  reported  that  "  the  improveme  it 
of  land,  in  its  eflFect  upon  the  price  of  food  and  upon  the 
dwellings  of  the  poor,  is  a  matter  of  public  interest;  but  that 
as  an  investment  it  is  not  sufficiently  lucrative  to  offer  much 
attraction  to  capital,  and  that  therefore  even  slight  difficulties 
have  a  powerful  influence  in  arresting  it."  As  we  have  seen, 
seven  and  a  half  millions  of  acres  in  England  alone  still  yield  no 
food  for  man  or  beast, — contribute  simply  nothing  to  the  support 
of  the  nation.  The  only  proposal  made  to  attack  these  masses  of 
unsubdued  nature  is,  so  far  as  we  know,  a  proposal  to  divide  them 
up  into  small  farms.  In  some  cases,  especially  in  the  Highlands 
of  Scotland,  the  peasantry  have  been  encouraged  to  enclose  and 
fertilize  small  patches  of  waste  ground  that  nobody  else  would 
touch.  At  the  expiration  of  their  nine  years'  leases  they  are 
commonly  ejected,  and  their  little  Jiolms  or  farms  are  taken  into 
the  larger  farms.  "  I  could  name  many,"  says  a  Scotch  land- 
agent,  "  who  use  this  crofting  for  their  waste  lands,  and  then 
turn  out  crowds  of  them  and  throw  their  land  into  large 
farms." 

(b)  It  has  failed  to  develop  the  natural  powers  of  the  soil. 
Were  even  the  area  that  is  now  under  tillage  to  be  cultivated 
as  experience,  both  in  England  and  elsewhere,  shows  to  be  per- 
fectly feasible,  the  country  would  be  under  no  necessity  of 
depending  upon  foreign  harvests  for  her  supply  of  food.  Eng- 
lish soil  has  been  made  to  yield  57  to  60  bushels  of  wheat  to  the 
acre  without  exhaustion.  The  average  yield  is  much  less  than 
half  so  much.  It  is  so,  because  only  the  merest  fraction  of  that 
soil  has  been  treated  as  the  scientific  knowledge  of  our  days 
suggests,  and  because  the  amount  of  capital  laid  out  upon  the 
land  under  the  system  of  large  farms  is  about  half  as  great  as 
would  be  expended  by  small  farmers  of  thrift  and  intelligence. 

(c)  But  the  fundamental  mistake  and  failure  has  been  in  the 
treatment  of  the  human  material  of  her  agriculture.      She  has 


FAILURE   IN   ENGLAND  AND   IRELAND.  83 

failed  to  bring  into  exercise  one  of  the  most  powerful  and  effi- 
cient motives  to  thrift  and  industry  that  exists  in  the  human 
breast,  viz:  the  attachment  of  the  small  holder  to  the  spot  of 
earth  that  is  his  own,  his  home.  That  passion  for  the  posses- 
sion of  land,  which  is  elsewhere  a  source  of  public  security  and 
social  permanence,  she  has  made  a  source  of  public  instability, 
By  all  the  tenor  of  her  legislation  and  the  drift  of  her  public 
opinion,  she  has  helped  in  the  work  of  sundering  the  workman 
from  the  soil,  and  of  either  driving  him  away  from  it  to  the  city 
or  retaining  him  in  the  pitiable  position  of  a  day-laborer  at  the 
lowest  rate  of  wages  consistent  with  bare  life  and  shelter.  She 
has  taken  no  pains  to  diffuse  the  intelligence  and  scientific 
knowledge  that  would  fit  the  rural  classes  to  till  the  land  as  the 
needs  of  the  country  and  the  time  demand.  She  has  left  them 
at  the  mercy  of  the  squires  and  the  farmers,  growing  every  day 
more  brutal  and  hopeless.  "  They  are  unable,"  says  Canon 
Girdlestone,  "  to  lay  by  anything.  They  are  long-lived,  but 
even  in  their  prime  are  feeble ;  and  at  the  age  of  fifty  often  crip- 
pled with  rheumatism,  the  result  of  poor  living,  sour  cider,  a 
damp  climate,  hard  work  and  anxiety  combined.  There  remains 
nothing  for  them  then  but  the  parish-pay  and  the  workhouse." 
87.  In  Ireland  the  English  conquest,  begun  in  1169,  found 
the  people  still  in  the  tribal  state.  The  land  generally  was  owned 
by  the  tribe,  and  the  chief's  rights  extended  little  farther  than  to 
temporary  maintenance  during  his  constant  peregrinations.  The 
conquerors  displaced  the  chiefs  by  Norman  barons,  who  held  the 
land  under  conditions  similar  to  those  which  prevailed  in  Eng- 
land at  that  time.  Not  until  the  completion  of  the  conquest,  in 
the  reign  of  Elizabeth,  was  there  any  disposition  to  disturb  the 
common  people.  In  that  and  the  succeeding  reign  great  areas 
of  Irish  soil  were  "  planted "  with  English  and  Scotch  settlers 
after  the  extrusion  of  the  previous  tenants,  and  the  jurisdiction 
of  the  English  common  law  was  extended  to  the  island,  setting 
aside  all  the  native  customs  of  tenure  and  inheritance.  The 
plantation  of  Ulster,  chiefly  by  Scottish  settlers,  was  the  largest 
of  these  operations  until  the  era  of  the  Commonwealth.     Crom- 


84  ELEMENTS   OF    POLITICAL   ECONOMY. 

well,  after  the  conquest  of  Ireland  in  1652,  formed  a  plan  to 
drive  the  native  population  into  Connaught  and  settle  the  three 
other  provinces  from  the  sister-island.  This  barbarous  policy 
was  carried  out  as  far  as  was  possible,  and  the  people — rich  and 
poor — stripped  of  their  lands.  At  the  Restoration  a  very  im- 
perfect restitution  was  effected,  and  the  attempt  to  make  the 
restitution  complete  under  the  reign  of  James  II.  was  defeated 
by  the  renewed  conquest  of  the  island  under  William  III.  The 
destruction  of  Irish  manufactures  by  hostile  legislation  in  this 
reign  produced  a  state  of  wretchedness  worse  than  any  caused 
by  mere  conquest  and  confiscation.  It  forced  the  people  to  secure 
land  on  any  terms.  They  became  tenants-at-will  at  rack-rents, 
with  the  certainty  that  the  improvement  of  their  lands  would 
lead  to  a  rise  in  their  rents.  For  six  generations  past  the  labor 
of  Irish  tenants  in  reclaiming  lands,  erecting  houses  and  fences, 
and  adding  to  the  value  of  their  holdings  has  been  confiscated 
by  their  landlords,  who  hardly  ever  lay  out  any  money  upon  such 
improvements.  There  are  exceptions,  but  this  is  the  very  general 
rule.  As  a  consequence,  the  Irish  people  have  had  no  motive  to 
improvement.  They  became  disheartened  and  wasteful  farmers. 
As  the  English  demand  for  meat  and  butter  seemed  to  furnish 
a  better  return  to  the  landlord,  great  bodies  of  the  people  have 
been  at  various  times  evicted  from  their  holdings  to  make  room 
for  grazing-farms.  If  they  could  not  manage  to  make  their 
way  to  America,  these  tenants  had  to  settle  on  any  bare  moun- 
tain-side or  barren  peat-bog,  where  they  find  shelter  and  obtain 
for  a  good  price  the  privilege  of  growing,  on  land  quite  unsuited 
for  the  purpose,  enough  potatoes  to  keep  them  alive.  The 
worst  of  these  evicting  landlords  were  those  who  obtained 
their  lands  on  the  sales  ordered  by  the  Encumbered  Estates 
Court  (1849-1859). 

The  inducement  originally  held  out  to  Scotch  and  English  set- 
tlers was  the  offer  of  "  tenant-right " — i.  c,  compensation  for  un- 
exhausted improvements,  and  free  sale  of  the  good-will.  This 
bargain  was  very  generally  broken  by  the  landlords.  Scotch  settlers 
of  Ulster  found  that  they  could  not  depend  upon  these  promises, 


IRISH    LAND   LAWS.  86 

and  to  save  themselves  from  ruin  they  emigrated  in  great  num- 
bers to  America  (1720-1770). 

The  recent  land  acts  of  1870  and  1881  have  for  their  purpose 
to  terminate  this  confiscation  of  improvements  and  of  tenant-right. 
They  allow  the  land-courts  to  fix  what  would  be  a  fair  rent  for 
the  land,  independently  of  the  improvements  the  tenant  has 
made.  They  punish  with  a  heavy  fine  the  eviction  of  tenants 
who  are  paying  a  fair  rent,  and  they  allow  the  tenant  to  dispose 
of  his  tenant-right  when  he  decides  to  throw  up  his  farm.  The 
landlord  himself  can  buy  this  at  a  valuation  if  he  so  wishes. 

See  Prendergast's  Cromwelb'an  Settlement  of  Ireland;  Sir  Gavan 
Duffy's  Young  Ireland;  Mr.  Sullivan's  Neio  Ireland;  and  Mrs.  Mar- 
garet T.  Sullivan's  The  Case  of  Ireland  (Philadelphia,  1881). 

In  the  Scottish  lowlands  the  history  of  land  tenure  has  run 
much  the  same  course  as  in  England.  In  the  Highlands  the 
tribal  tenure  lasted  until  1748,  the  lands  being  the  property 
of  the  whole  clan,  and  the  chieftains  being  chosen  by  the  people 
and  liable  to  be  deposed  if  unpopular.  In  that  year  the  British 
Parliament  abolished  the  hereditary  jurisdictions,  of  the  chiefs, 
and  authorized  the  crown  to  give  to  each  of  them  a  baronial 
title  to  the  lands  of  their  clan,  if  they  would  surrender  their 
chieftainship.  Under  this  law  the  whole  of  the  Highlands  have 
been  confiscated  from  the  people  and  converted  into  private 
estates.  The  clansmen,  from  landowners,  have  become  tenants, 
holding  at  the  proprietor's  pleasure.  Great  multitudes  of  them 
have  been  evicted  to  make  room  for  deer  forests  and  sheep  pas- 
tures ;  others  have  seen  their  little  holdings  absorbed  into  large 
farms  held  by  capitalist  farmers.  The  towns,  the  sea-coast,  and 
America  have  received  the  people  of  the  Highlands,  which  now 
could  not  furnish  one-tenth  of  the  great  military  contingent 
which  was  raised  eighty  years  ago  for  the  war  with  France. 
The  most  cruel  evictions  were  those  of  Sutherlandshire,  in  the 
second  decade  of  the  century.  The  whole  interior  of  this  great 
shire  was  depopulated,  sixteen  thousand  tenants  being  driven 
to  a  barren  sea-shore  or  to  America.  The  heather  was  fired  in 
early  spring  to  destroy  the  pasture  and  force  the  immediate  sale 


86  ELEMENTS   OF    POLITICAL    ECONOMY. 

of  fcheir  cattle.  Their  homes  were  burnt  above  the  people's 
heads  to  effect  their  expulsion.  Delicate  women  died  of  the 
shock,  old  people  lost  their  reason ;  but  not  a  hand  was  lifted 
in  resistance  or  revenge.  When  removed  to  the  seashore  they 
were  required,  after  hard  and  unaccustomed  labor  in  fishing,  to 
aid  in  the  erection  of  new  homes  under  the  direction  of  the 
agent.  For  farming  they  had  nothing  except  a  few  patches  of 
soil  on  the  ledges  of  the  rocks. 

See  Mr.  John  Murdoch's  "Letters  on  the  Sutherland  Evictions,"  in 
the  Mark  Lane  Express.  The  history  of  those  evictions  has  been  mis- 
represented very  elaborately  in  various  works  of  reference,  and  in  Mrs. 
H.  B.  Stowe's  Sunny  Memories  of  Foreign  Lands,  although  their  charac- 
ter was  exposed  very  fully  by  the  report  of  the  Parliamentary  Commis- 
sion on  the  Scottish  Poor  Laws.  One  of  the  actual  victims,  a  High- 
lander in  Canada,  prepared  a  reply  to  Mrs.  Stowe's  chapter  on  the 
subject,  which  he  called  Gloomy  Memories  of  the  Sutherland  Clearances, 
but  his  sudden  death  just  after  his  book  was  printed  prevented  its  get- 
ting into  circulation,  and  it  is  now  exceedingly  scarce. 

In  very  few  instances  have  the  tenants  of  the  large  farms  prospered  in 
their  new  holdings.  Many  of  them  have  thrown  up  their  farms  and  left 
the  country,  and  the  landlords  would  be  glad  to  relet  to  small  farmers,  but, 
having  allowed  the  farm-buildings  of  the  ejected  tenants  to  fall  into  decay, 
they  cannot  secure  such  tenants  without  making  large  outlays  in  repairs. 

§  88.  Passing  from  England  to  the  Continent,  we  find  the 
rival  nations  growing  in  the  sort  of  strength  that  was  once  but 
is  no  longer  the  boast  of  England,  the  yeomanry.  In  France 
small  proprietorship  was  the  rule  even  before  the  Revolution. 
The  old  records  abound  in  accounts  of  their  purchases.  It  was 
their  wretchedness  under  the  excessive  burdens  of  the  Old 
Regime,  when  they  paid  nearly  all  the  taxes,  that  led  Arthur 
Young  to  prefer  large  farming;  yet  he  admits  that  the  peasants 
of  many  parts  of  France  were  prosperous,  industrious  and  thrifty. 
They  had  risen  to  that  state  out  of  the  deepest  degradation.  In 
the  middle  ages  they  could  not  stand  against  the  English 
yeoman,  because  they  were  little  better  than  slaves.  The  free 
play  of  economic  laws  steadily  bettered  their  condition,  and 
vested  in  them  more  and  more  of  the  soil.  The  Revolution 
abolished  all  customary  tenures,  but  it  threw  the  royal  demesnes 


PRUSSIAN   LAND   LAWS.  87 

and  the  estates  of  the  nobility  upon  the  market,  and  abolished 
the  right  of  primogeniture,  besides  releasing  the  peasantry  from 
the  burden  of  excessive  taxation.  The  number  of  large  estates 
rapidly  declined ;  that  of  the  actual  landowners  has  immensely 
increased.  The  soil  of  France  is  now  owned  by  more  than  four 
millions  of  her  people.  M.  de  Lavergne,  often  quoted  by  Eng- 
lish economists  as  approving  of  the  English  system,  says:  "  All 
the  world  accepts  petty  proprietorship  not  only  as  a  necessity, 
but  as  a  benefit.  It  is  recognised  as  favorable  to  agricultural 
productiveness  and  to  public  security."  To  it  France  owes  her 
vast  wealth  and  her  wonderful  financial  elasticity,  exhibited  in 
her  management  of  the  immense  debt  incurred  by  the  last  war. 
In  many  respects  French  agriculture  has  much  to  learn  from 
that  of  England;  but  if  the  history  of  each  for  the  last  two 
hundred  years  be  taken  for  comparison,  the  result  will  be  a 
iudgment  greatly  in  favor  of  the  former. 

§  89.  Belgium  is  the  strongest  case  in  favor  of  small  farms 
and  intensive  culture.  The  farmer  in  the  Flemish  provinces 
lays  out  twice  as  much  on  an  acre  as  is  done  in  England.  Farms 
are  continually  divided,  and  with  every  division  their  yield  of  pro- 
duce has  increased.  Vast  quantities  of  horned  cattle  and  of 
green  crops  are  raised ;  wheat,  indeed,  is  imported,  but  paid  for 
by  exports  of  meat  and  vegetables.  East  Flanders  has  and  feeds 
1800  people  to  every  square  mile  of  her  barren  soil.  The  small 
owner  generally  saves  half  his  income,  and  is  continually  on  the 
outlook  for  more  land.  The  farms  are  mostly  between  five  and 
seven  acres  in  extent.  Most  of  the  land,  indeed,  is  farmed  at 
rack-rents  on  nine  years'  leases,  with  "  customary  "  compensation 
for  unexhausted  improvements;  but  a  large  proportion  is  stead- 
ily passing  into  the  hands  of  small  holders,  who,  as  in  France, 
outbid  all  other  competitors.  So  strong  is  the  hunger  for  land 
that  it  is  bought  up  with  full  knowledge  that  it  will  not  give  as 
high  rate  of  interest  upon  capital  as  is  offered  by  the  money- 
market.  The  people  are  poor  through  the  lack  of  all  large  in- 
dustries and  the  market  they  give  for  labor  and  for  food,  and 
the  cons<»quent  tax  of  the  cost  of  transportation  upon  most  of 


88  ELEMENTS    OF   POLITICAL   ECONOMY. 

what  they  need  besides  food.  But  their  poverty  is  disappear- 
ing; want  and  destitution  are  becoming  more  rare  ;  agricultural 
methods  are  rapidly  improving;  the  country  is  tilled  like  a 
garden,  yielding  several  heavy  crops  every  year,  and  presenting 
the  most  beautiful  and  civilized  appearance  of  any  in  the  world. 
§  90.  In  Prussia  the  mediaeval  system  held  its  ground  down 
to  the  beginning  of  the  present  century.  The  government 
"  saw  with  terror,  in  1808,  how  insecure  was  a  state  which  had 
BO  great  a  claim  on  the  bodies,  and  none  at  all  on  the  hearts  of 
its  people"  (Gustav  Freytag).  Some  opposed  change.  The 
hauer  was  stupid,  lazy  and  thriftless,  it  was  said ;  nothing  could 
be  made  of  him.  A  government  commission  met  at  Memel  in 
1807  to  draft  a  land-law  that  should  effect  the  transition  from 
the  mediaeval  to  the  modern  agriculture.  They  found  them- 
selves divided  into  two  parties  :  on  the  one  side  the  great  states- 
man Stein,  the  great  historian  Niebuhr  and  his  friend  Stage- 
man  n  ;  on  the  other  a  group  of  now-forgotten  doctrinaires,  who 
had  studied  English  political  economy  under  Kraus  at  Koenigs- 
berg.  The  latter  wished  for  a  policy  that  would  secure  the 
maximum  of  production  from  the  soil,  independently  of  the 
welfare  of  the  producers.  "  They  held  it  indifferent  whether  the 
present  feebler  proprietors  remained  or  not,  if  their  place  was 
supplied  by  wealthier  ones,  and  thus  the  greatest  possible 
amount  of  profit  secured."  They  preferred,  indeed,  that  the 
change  should  take  that  shape,  following  the  English  commer- 
cial maxim :  "  most  produce  by  least  labor."  "  Why,"  they 
asked,  "  waste  the  productive  force  of  four  proprietors  and  six- 
teen horses  to  do  that  which  one  proprietor  and  six  horses  can 
do  better  ?"  The  other  party  "  considered  the  promotion  of  the 
welfa.re  of  the  actually-existing  occupants  of  the  soil  as  the  true 
problem  of  the  statesman;"  else  they  "saw  the  likelihood  of 
obtaining  a  class  of  proprietors  who  would  have  no  moral  interest 
in  the  welfare  of  the  country,  and  they  felt  the  importance  of 
a  numerous  class  of  small  landholders."  Happily  their  counsels 
prevailed;  the  transition  was  effected  by  impartial  legislation, 
aud  not  on  English  principles  nor  by  English  methods.     The 


LAND  TENURE  ON  THE  CONTINENT.        89 

peasant  secured  the  complete  control  of  his  own  labor,  and  rose 
from  a  state  of  villeinage  to  the  freedom  of  a  landowner ;  in  re- 
turn he  ceded  to  his  former  master  a  portion  of  the  land  he  had 
held,  retaining  the  rest  in  fee  simple.  All  restrictions  on  the 
sale  of  land  were  removed,  and  provision  was  made  for  cutting 
off  entails.  This  measure  was  enlarged  and  extended  to  all  parta 
of  the  kingdom  in  1811.  It  aimed  at  the  highest  end  of 
national  economy,  the  welfare  of  the  people;  it  secured  the 
lower  also — the  maximum  of  production  from  the  soil 

Since  its  adoption,  the  yeoman  class  has  grown  in  numbers, 
wealth  and  independence.  In  Westphalia  especially,  land  con- 
stantly passes  into  their  hands  by  purchase.  Its  price  has 
risen  rapidly;  it  rose  seventy-five  per  cent,  between  1829  and 
1813.  The  bulk  of  it  is  now  in  the  hands  of  the  actual  tillers 
of  the  soil ;  the  agricultural  methods  are  very  greatly  improved, 
and  the  hauer  is  now  proverbial  for  thrift  and  industry. 

§  91.  Switzerland  takes  rank  next  to  Belgium  in  the  per- 
fection of  its  intensive  culture,  and  the  density  of  its  popula- 
tion. Every  foothold  of  ground  is  occupied ;  if  the  clefts  of  the 
rocks  contain  no  soil,  it  is  carried  thither. 

Norway  with  its  rocky  surface,  and  Denmark  with  its  alterna- 
tions of  peat  and  gravel,  would  be — like  Flemish  Belgium — in- 
accessible to  any  sort  of  agriculture  that  did  not  bring  into  play 
the  entire  devotion  and  earnestness  of  their  people.  In  both 
the  greatest  difficulties  have  been  overcome  and  the  largest  out- 
lays of  labor  rewarded. 

Russia,  in  the  emancipation  of  her  serfs  (1861),  had  to  solve 
the  problem  that  was  before  Prussia  half  a  century  earlier.  The 
large  proprietors  and  the  students  of  English  political  and  rural 
economy  wished  to  see  the  land  vested  in  the  nobility,  and  the 
bulk  of  the  peasantry  reduced  to  the  level  of  day-laborers.  But 
the  aristocratic  party  had  lost  its  prestige  through  its  failure  to 
carry  the  Crimean  war  to  a  successful  issue.  The  government 
secured  to  the  serfs  the  right  to  purchase  at  a  moderate  rate 
enough  arable  and  pasture  land  for  the  needs  of  each  village, 
and  undertook  to  collect  the  payment  in  »smull  anuuuV  instal- 


90  ELEMENTS    OF    POLITICAL    ECONOMY. 

ments  and  pay  it  over  to  the  landowners.  That  the  economic 
results  of  the  measure  are  as  yet  anything  but  satisfactory  must 
be  admitted.  This  is  due  (1)  to  the  virus  of  slavery  still  poison- 
ing the  minds  of  the  people  and  leading  them  to  regard  work  as 
a  curse  and  a  disgrace ;  (2)  to  the  system  of  taxation,  by  which 
the  public  burdens  are  thrown  chiefly  upon  the  peasantry ;  and 
(3)  to  the  fact  that  the  system  of  communistic  land  tenure  is 
still  kept  up  in  Russia,  and  in  such  a  way  as  to  deprive  the 
peasant  of  many  of  the  most  powerful  impulses  to  industry,  im- 
provement and  thrift. 

In  Italy,  the  plains  of  the  north  are  under  petty  culture,  and 
the  excellence  of  the  agriculture  is  proverbial.  In  Tuscany  the 
lands  are  farmed  in  larger  portions  on  the  metayer  system,  the 
landlord  and  tenant  dividing  the  crop  equally.  To  pass  from 
Lombardy  to  Tuscany,  is  to  go  from  better  to  worse ;  but  to  cross 
the  Tiber  to  what  was  the  Papal  States  and  Naples,  is  to  come 
into  a  country  of  large  farms,  in  which  beggary  and  bad  tillage 
deface  the  earth.  The  yield  is  much  smaller,  and  the  rural 
methods  are  those  of  the  days  of  Hildebrand,  if  not  of  Cato  the 
Censor. 

§  92.  Another  chief  point  in  the  economy  of  land  is  to  secure 
and  preserve  an  equilibrium  of  the  three  great  elements  of  the 
industrial  state — the  agricultural,  the  commercial  and  the  manu- 
facturing. To  cherish  and  foster  agriculture  alone  is  not  to 
cherish  it  at  all.  The  farmer's  work,  unless  misdirected  and 
wasteful,  produces  more  than  furnishes  food  for  himself  and 
his  household.  Were  it  otherwise  the  whole  population  would 
have  to  be  employed  in  agriculture,  as  was  the  case  in  the  earliest 
period  of  the  art.  The  existence  of  such  a  surplus  sets  free  a 
part  of  the  population  to  engage  in  work  of  producing  other 
things  that  society  counts  among  the  necessities  and  comforts  of 
Ufe.  When  this  class,  and  the  number  of  persons  needed  for 
the  exchange  of  the  products  of  both  classes,  are  large  enough 
to  consume  the  ordinary  surplus  product  of  the  farming  class, 
the  three  classes  stand  in  equilibrium ;  the  farmer  is  assured  of 
a  niarket  for  his  crop,  and  of  a  fair  exchange  of  other  objects 


THE   EQUILIBRIUM    OF   THE    INDUSTRIES.  91 

of  desire  for  what  he  can  spare.  15ufc  if  thes)  two  classes  are 
not  large  enough  to  consume  his  surplus,  the  equilibrium  does 
not  exist,  and  the  farmer  must  suffer  accordingly.  Ilia 
labor  goes  for  nought;  his  crop  rots  in  the  fields,  or  if  gathered 
and  taken  to  market,  brings  a  trifling  price  because  farmers  are 
underbidding  each  other  for  the  small  sales  that  are  possible. 
In  our  Mississippi  valley,  for  instance,  the  equilibrium  of  the 
two  classes  has  not  yet  been  attained.  "  The  burning  of  corn 
for  fuel  in  the  West,  of  which  we  hear  dismal  stories  once  in 
seven  years,  is  an  indication  that  too  many  people  there  are  en- 
gaged in  farming  and  too  few  in  manufacturing"  {The  Nation, 
New  York,  1869). 

In  the  absence  of  asuflicient  home  market,  the  foreign  demand 
for  breadstuffs  and  other  farm  produce  is  the  only  dependence 
of  the  farmer.  For  reasons  hereafter  given,  the  exchange  of 
raw  produce  for  manufactured  goods  between  distant  points  can 
never  be  a  remunerative  one  for  the  producer  of  the  former. 
Were  the  rural  economy  of  every  nation  wisely  managed,  no  such 
exchange  could  take  place ;  save  in  years  of  extraordinary  scarcity 
the  transportation  of  large  quantities  of  breadstuffs  and  the  like 
across  the  seas  would  not  be  thought  of.  The  foreign  market 
can  therefore  last  no  longer  than  the  bad  management  of  a  few 
densely  peopled  countries  lasts ;  with  every  advance  in  agricul- 
tural methods  and  rural  economy  it  must  threaten  to  disappear. 
And  even  while  it  lasts  it  is  the  most  uncertain  of  all  markets. 
The  farmer  who  depends  on  it  takes  the  risk  of  two  harvests  in- 
stead of  one.  If  the  foreign  country  have  a  bad  harvest,  and 
so  need  much  grain,  while  his  own  country's  harvest  is  not  too 
good,  he  may  get  as  fair  a  profit  as  the  nature  of  the  case  per- 
mits ;  in  any  other  combination  of  circumstances  he  will  not. 
Still  more  complicated  are  his  chances  when  other  nations  nearer 
the  foreign  market  are  competitors  to  supply  its  needs.  In 
that  case  his  success  depends  upon  their  comparative  failure  also. 
Worse  still,  the  price  he  can  get  for  what  he  sells  at  home  is 
fixed  and  regulated  by  that  of  what  he  sends  abroad  j  if  a  large 
surplus,  raised  for  the  foreign    market,  be  left  on  his   hands, 


92  ELEMENTS    OF    POLITICAL   ECONOMY. 

prices  will  rule  low  in  the  home  market  also,  because  he  and  his 
fellow-farmers  will  be  underselling  each  other  in  competing  to 
supply  its  demand. 

§  93  The  farmer  who  depends  upon  a  distant  market  can 
never  carry  on  his  farming  by  the  best  methods.  He  cannot 
raise  that  variety  of  crops  by  which  the  pressure  of  tillage  upon 
the  resources  of  the  soil  is  lightened ;  for  such  crops  cannot  be 
transported  to  a  distance.  He  must  grow  the  great  staples  that 
meet  the  foreign  demand,  year  after  year,  to  the  exhaustion  of 
the  most  important  elements  of  his  land.  He  cannot  make  such 
returns  to  the  soil  as  will  keep  up  its  fertility ;  the  refuse  of 
the  factory  and  the  town  are  not  to  be  had.  The  highly  nitro- 
genized  forms  of  animal  manure  he  can  procure  in  trifling 
quantities  only,  as  his  own  cattle  and  those  of  his  brother 
farmers  are  the  only  beasts  of  the  sort  in  his  neighborhood,  and 
are  far  fewer  in  number  than  if  he  had  a  town  close  at  hand 
making  large  demands  for  meat  and  dairy  produce.  He  can 
only  farm  thriftlessly  and  wastefully ;  in  our  Eastern  sense  of 
the  word  his  place  is  not  a  farm,  but  a  wheat  factory  or  a  corn 
factory.  The  farmer  who  lives  near  his  market  is  continually 
improving  an  instrument  of  great  power  and  value;  he  who 
lives  at  a  distance  from  his  market  is  continually  injuring  it  and 
breaking  it.  The  one  is  adding  every  year  to  the  wealth  of  the 
soil  beneath  his  feet;  the  other  is  exporting  that  wealth  to  a 
distance,  without  the  opportunity  of  making  any  return  to  the 
soil  he  is  robbing  of  its  fertility. 

The  census  of  1870  exhibits  the  undue  preponderance  of  agriculture  ic 
the  states  we  have  referred  to.  In  six  Western  States  fifty-four  per  cent, 
of  those  who  report  any  occupation  were  engaged  in  farming,  while  of 
the  whole  population  of  the  United  States  so  reported  only  forty-seven 
per  cent,  are  farmers.  In  nine  Southern  States,  from  North  Carolina  to 
Texas,  the  proportion  is  as  high  as  seventy-five  per  cent. 

The  six  Western  States  have  nineteen  per  cent,  of  the  national  popu 
lation ;  but  they  raise  forty  per  cent,  of  the  whole  corn  crop,  and  forty- 
two  per  cent,  of  the  wheat  croj),  while  of  all  other  crops  they  raise  less 
than  their  share.  Their  industry  lacks  variety,  being  chiefly  agriculture  ; 
their  agriculture  lacks  variety,  being  chiefly  the  growth  of  cereals.  In 
1872,  wheu  the  Eugliah  demand  for  American  broadstufl's  was  much  above 


RICARDO'S    "LAW   OP   RENT."  98 

the  average,  Illinois  produced  enough  to  feed  all  her  own  population,  and 
to  supply  the  whole  English  demand,  at  that  rati>,  lor  ten  years.  Soe  a 
very  able  article  on  "The  Farmers'  Difficulty,"  by  Edward  Stauwdod,  in 
Old  and  New  for  September  1872. 

§  94.  The  theories  of  the  national  economy  of  land  which 
pass  current  with  the  English  economists  seem  to  be  suggcstel 
by  their  practice.  Like  the  theory  of*  population  discussed  in 
the  last  chapter,  they  seem  designed  to  excuse  the  anomalies 
and  miseries  of  English  society,  by  throwing  the  blame  on  the 
natural  laws  which  govern  and  condition  the  growth  of  society. 

Indeed,  the  chief  of  the  English  theories  about  land  grew 
directly  out  of  the  Malthusian  theory  of  population.  In  the 
last  statement  of  that  theory,  that  Mr.  Malthus  made  (1826)  he 
concedes  to  his  numerous  opponents  that  so  long  as  good  land 
was  to  be  had,  "  the  rate  at  which  food  could  be  made  to  in- 
crease would  far  exceed  what  was  necessary  to  keep  pace  with 
the  most  rapid  increase  of  the  population "  possible.  This 
shows  that  the  whole  question  turns  upon  the  relation  of  man  to 
the  soil. 

The  "  theory  of  population"  is  therefore  the  parent  of  the 
"  theory  of  rent"  announced  by  David  Ricardo  in  1815,  and 
designed  to  explain  the  way  in  which  the  growth  of  society 
makes  the  few  rich  and  the  many  poor,  by  inuring  chiefly  to 
the  benefit  of  a  class  of  monopolists  called  landlords.  In  his 
view,  rent  arises  from  the  insuflSciency  of  good  land  to  supply 
the  entire  people.  The  first  settlers  of  a  country  take  possession 
of  the  best  lands;  the  second  set  of  cultivators  are  obliged  to 
take  those  that  are  worse,  or  pay  nearly  if  not  quite  the  difi'er- 
ence  in  rent.  When  the  second  grade  of  land  has  been  settled 
up,  the  next  set  must  take  up  a  third  grade,  or  pay  nearly  if 
not  quite  the  difference  in  yearly  value  for  a  share  of  the  first  or 
second.  Thus  as  the  growth  of  numbers  requires  the  tillage  of 
an  ever  larger  area  of  the  soil,  each  higher  grade  of  land  pays 
an  increasing  rent.  With  every  advance  in  population  men  are 
driven  to  poorer  and  more  wretched  soils,  and  the  monopolists 
of  the  higher  grade  of  lands  are  able  to  live  in  idleness  and 


94  ELEMENTS   OF   POLITICAL    ECONOMY. 

plenty  upon  their  continually  increasing  share  of  the  growths  of 
the  soil.  The  only  limit  to  the  process  will  be  reached  when 
the  only  land  that  is  unoccupied  is  too  poor  to  repay  cultivation. 
The  rent  that  can  be  secured  for  any  given  piece  of  ground  will 
be  nearly  if  not  quite  the  difiference  between  its  annual  yield 
and  that  of  the  poorest  lands  under  cultivation. 

§  95.  To  show  what  Mr.  Ricardo  asserts  to  be  the  tendency 
at  work  as  a  country  grows  in  density  of  population,  let  us  sup- 
pose the  case  of  an  island  divided  into  a  number  of  areas  equal  in 
extent  but  of  various  degrees  of  fertility,  and  each  large  enough 
to  employ  a  hundred  laborers.  The  best  land  in  the  series  can 
produce  (let  us  say)  900  bushels  of  wheat,  giving  nine  bushels 
to  each  laborer  if  there  be  an  equal  division.  The  next  best 
will  produce  (let  us  say)  one-tenth  less  or  810  bushels,  giving 
1710  (or  900  plus  810)  bushels  to  be  divided  between  two 
hundred  workmen  ;  and  so  on.  If  the  population  double  every 
twenty-five  years,  as  Mr.  Malthus  says  it  may,  the  following 
table  shows  what  the  growth  of  population  and  of  sustenance 
will  be  in  two  centuries  : — 


Years. 

Persons. 

Bushels. 

Share. 

1 

100 

900 

9. 

26 

200 

1,710 

8.151 

51 

400 

3,150 

7.875 

76 

800 

5,670 

7.0875 

101 

1,600 

9,990 

6.243 

126 

3,200 

17,190 

5.37 

151 

6,400 

31,710 

4.92 

176 

12,800 

48,990 

3.8 

201 

25,600 

72,030 

2.8 

But  on  the  theory  of  unequal  division  propounded  by  Mr. 
Ricardo,  the  owners  of  the  lands  last  occupied  would  not  get 
2.8  but  only  1.8  bushels  each,  and  the  amount  which  falls  to 
them  is  just  or  almost  the  share  that  falls  to  the  tenants  of  any 
of  higher  grade.  The  difference  between  that  share  and 
the  actual  annual  yield  is  absorbed  in  rent.  If  the  entire  seven 
grades  of  superior  land  is  leased  to  tenants,  its  owners  absorb 
nearly  if  not  quite  25,950  bushels  as  their  royalty  on  the  use  of 


POPULARITY   OF   RICARDO'S    "LAW."  Of) 

the  land,  Icuvinj;  46,080  bushels  to  the  actual  workmnn.  Tho 
denser  the  population,  therefore,  the  greater  the  uiiscry  of  tho 
people,  and  every  growth  in  their  numbers  increases  their  own 
poverty  and  adds  to  the  wealth  of  these  monopolists. 

§  96.  This  doctrine  found  even  more  acceptance  with  tho 
English  school,  and  elicited  far  less  criticism  and  opposition, 
than  that  of  Mr.  Malthus  on  population.  It  was  a  more  direct 
and  explicit  apology  for  the  anomalous  state  of  things  in  Eng- 
land ;  it  explained  how  a  nation  might  grow  in  wealth  while  a 
very  large  share  of  its  people  sank  ever  deeper  in  poverty  and 
misery.  It  was  a  still  more  explicit  and  satisfactory  verdict  of 
"  Nobody  to  blame," — a  still  clearer  excuse  for  the  absence  of 
effort  to  amend  things.  Mr.  J.  S.  Mill  goes  so  far  as  to  pro- 
nounce this  law  of  rent  and  of  the  increasing  sterility  of  the 
land  brought  under  cultivation,  to  be  the  very  corner-stone  of 
the  science.  "  After  a  certain  not  very  advanced  stage  in  the 
progress  of  agriculture  ...  in  any  given  state  of  agricultural 
skill  and  knowledge  .  .  .  every  increase  of  produce  is  obtained 
by  more  than  a  proportional  increase  in  the  application  of  labor 
to  the  land.  This  general .  law  of  agricultural  industry  is  the 
most  important  proposition  in  Political  Economy.  Were  the 
law  different,  nearly  all  the  phenomena  of  the  production  and 
distribution  of  wealth  would  be  other  than  they  are."  An 
American  writer  of  the  same  school  says  :  "  It  is  natural — and 
if  natural,  proper — though  we  may  not  see  the  reason — that 
poverty  and  want',  and  disease  and  misery,  should  be  the  next- 
door  neighbors  of  wealth  and  unbounded  prosperity." 

§  97.  On  Mr.  Ricardo's  theory  that  land  derives  its  yalue 
from  the  natural  properties  of  the  soil,  and  not  from  :he  labor 
expended  on  it,  and  that  landlords  are  a  class  of  monopolists 
who-  have  possessed  themselves  of  it,  and  thus  managed  to  make 
the  growth  of  society  inure  chiefly  to  their  own  benefit,  the 
right  of  ownership  in  land  is  one  that  rests  on  no  sufl5cient 
foundation,  and  one  that  many  of  the  interests  of  society  call 
upon  the  state  to  set  aside  and  destroy.  Mr.  Ricardo  himself 
was  no  friend  of  these  "  monopolists,"  and  his  school  are  as  little 


96  ELEMENTS    OF   POLITICAL   ECONOMY. 

SO.  Especially  in  late  years  they  have  been  given  to  using 
phrases  that  strongly  resemble  the  utterances  of  those  com- 
munists, who  would  have  the  right  to  landed  property,  if  not  to 
all  property,  repudiated  by  society.  They  have  held  up  the 
land-tenure  of  their  country  as  the  source  of  nearly  all  its  social 
evils ;  they  have  insisted  that  the  nature  of  landed  property  is 
such  that  it  is  both  the  right  and  the  duty  of  the  state  to  inter- 
fere with  it  in  ways  that  would  be  public  robbery  if  applied  to 
other  sorts  of  property ;  they  have  declared  that  the  ownership 
of  land — in  contrast  to  the  ownership  of  other  things — is  a 
public  trust,  a  stewardship  of  which  the  nation  may  exact  an 
account.  The  offspring  of  these  teachings  is  the  Irish  Land 
Law  of  1870,  by  which  the  landowner  is  forbidden  to  rent  his 
land  for  the  price  that  it  will  bring  in  the  open  market.  All 
contracts  are  to  be  on  terms  that  an  Irish  judge  shall  decide  to 
be  reasonable,  and  when  the  lease  expires  the  tenant  cannot  be 
ejected  unless  paid  for  his  good- will  and  improvements. 

§  98.  Do  the  facU  of  history  bear  out  this  theory  ?  If  they 
do  we  shall  find  (1)  that  in  any  given  area  the  amount  of  the 
produce  of  the  land  obtained  in  earlier  times  is  greater  in  pro- 
portion to  the  number  of  laborers ;  (2)  that  of  two  countries, 
or  two  districts  in  the  same  country,  if  other  things  be  equal, 
the  one  that  is  poorest  in  people  is  the  one  in  which  the  average 
degree  of  personal  wealth  and  comfort  is  the  highest;  (3)  that 
the  share  that  fails  to  the  landlord  increases,  and  that  which 
falls  to  the  laborer  diminishes,  as  more  land  is  brought  under  cul- 
tivation. 

Not  one  of  these  results  is  sustained  by  observation.  The 
facts  alleged  in  the  previous  chapter  in  regard  to  the  con- 
dition of  savage  nations,  and  of  civilized  peoples  in  the  earlier 
stage,  show  us  that  the  thinly-settled  countries  are  those  in 
which  continual  poverty  prevails,  and.  frequent  famines  occur. 
In  the  first  and  the  second  points,  therefore,  the  theory  diverges 
widely  from  the  facts. 

On  the  third  point — the  increasing  sliare  of  the  landlord,  as 
distinguished  from  an  increasing  amount — the  theory  is  equally 


ENGLISH   AND   FRENCH   HISTORY.  97 

at  fault.  With  the  growth  of  society  in  numbers,  in  intelligence, 
in  the  eflSciencyof  its  workers,  the  landlord  obtains  a  continually 
increasing  amount,  but  a  continually  decreasing  share.  His 
third  falls  to  a  fourth  of  the  produce,  but  the  fourth  is  more 
than  the  third  was;  the  fourth  becomes  a  fifth,  but  the 
actual  amount  is  still  increased.  Adam  Smith  pointed  this  out 
as  the  difference  between  the  times  when  feudal  bondage  existed 
in  Europe  and  the  whole  crop  fell  to  the  landlord,  and  his  own 
day  when  the  landlord  took  a  third  ot  a  fourth  part  of  the  pro- 
duce, but  got  three  or  four  times  as  much  as  the  whole  had  once 
amounted  to. 

Mr.  Malthus  showed  from  official  returns  that  in  England  the 
landlord  in  his  day  took  but  a  fifth  of  the  crop  in  rent,  and  yet 
got  a  larger  quantity  than  in  previous  ages  when  his  share  had 
been  one-fourth,  one-third,  or  even  two-fifths.  We  have  it  on 
equally  high  authority  that  between  1790  and  1833  the  amount 
got  by  the  landlord  had  doubled,  while  the  improved  condition 
of  the  laborer  showed  that  the  increase  had  not  been  at  his  ex- 
pense. Mr.  Senior  says  that  the  improvements  in  England 
between  1776  and  1836  had  "  more  than  doubled  the  wages  of 
labor  and  nearly  trebled  the  value  of  land.'' 

These   results  are  not  open  to  question ;  they  have  been  reached  by 
competent  statists,  all  of  them  of  the  school  of  Ricardo. 

The  official  figures  in  regard  to  France  show  that  of  the  gross 
produce  of  the  culture  of  the  soil,  35,  37,  43,  60  and  60  per 
cent.,  had  been  paid  as  the  cost  of  cultivation  at  the  dates  1700, 
1760, 1788,  1813  and  1840,  and  that  the  yearly  sum  that  fell  to 
each  family  engaged  in  agriculture  at  each  date  was  135,  126, 
161,  400  and  500  francs  respectively.  Comparing  these  figures 
with  the  price  of  bread  at  each  date,  we  find  that  the  people  of 
France  had  not  much  over  half  enough  to  eat  under  Louis  XIV. ; 
about  two-thirds  of  enough  under  Louis  XV.  ;  three-fourths 
under  Louis  XVI.,  and  more  than  enough  under  the  Empire. 
The  minister  D'Argenson  in  1753,  a  year  of  no  special  scarcity, 
says :  "  Men  die  around  us  like  flies  and  are  reduced  to  eat 
grass."  The  Duke  of  Orleans  brought  a  loaf  of  fern  bread  to 
7 


98  ELEMENTS   OF   POLITICAL  ECONOMY. 

the  Royal  Council,  and  placing  it  before  the  King,  his  brother, 
said  :  "  Sire,  see  what  your  subjects  live  upon  V  The  returns  to 
labor  in  France  are  by  no  means  what  they  ought  to  be  even 
now.  France  is  more  fertile  than  England,  yet  two-thirds  of 
the  French  people  are  engaged  in  producing  food  for  the  nation, 
against  one-third  of  the  English ;  and  with  all,  the  latter  are 
better  fed  and  more  prosperous  generally.  Furthermore,  one- 
sixth  of  the  soil  of  France  is  covered  with  forests  ;  one-twenty- 
fourth  of  England.  If  Mr.  Ricardo  be  right,  this  should  mean 
that  the  pressure  of  population  has  not  yet  brought  the  French 
nation  to  the  cultivation  of  the  poorer  soils,  and  that  the  acre- 
age under  tillage  yields  a  larger  average  of  bushels  than  in 
England.  But  notoriously  the  reverse  of  this  is  true.  And  if 
we  compare  department  with  department,  it  is  found  that  the 
most  populous  parts  of  France  are  also  those  in  which  the  yield 
per  acre  and  the  consumption  of  food  per  head  are  both  greater, 
and  the  quality  of  the  food  better,  than  in  the  others. 

§  99.  The  study  of  the  early  history  of  land-tenures,  begun 
since  Mr.  Ricardo's  time,  it  is  now  admitted  by  English  scholars, 
discredits  his  assumption  that  all  the  facts  known  to  us  can  be 
traced  back  to  the  competition  for  the  use  of  the  soil.  Such 
competition  is  quite  modern  in  its  origin.  In  former  times  land 
was  not  held  by  individuals,  but  by  associated  groups,  bound 
together  by  kinship  and  by  immemorial  custom.  The  whole 
group  held  the  soil  in  common  as  an  inalienable  possession,  and 
assigned  parts  of  it  to  single  families  for  their  use.  While  cus- 
tom defined  the  rights  of  these  families  and  prevented  all  intru- 
sion upon  them,  custom  also  debarred  the  family  from  disposing 
of  those  rights.  Where  some  chief  or  lord  of  the  manor  pos- 
sessed a  claim  upon  the  services  of  the  rest  of  its  inhabitants,  the 
kind  and  amount  of  this  also  were  fixed  by  custom  j  and  where 
a  violent  change  of  lordship  overthrew  existing  customs,  others 
of  equal  rigidity  quickly  grew  up  in  their  stead,  and  were 
quietly  assumed  to  have  held  from  time  immemorial.  No 
market  for  land,  and  consequently  no  competition  for  its  po3- 
eession  existed   among   the   actual    cultivators.     Only  the  ex- 


RICARDO'S  ANACHRONISM.  99 

tiuction  of  these  tenures  in  common,  and  the  enclosure  of  the 
lands,  created  individual  ownership  in  the  modern  sense,  and 
with  it  competitive  rents.  Down  to  quite  recent  times  the  rent 
of  land  even  in  England  was  fixed  by  custom,  not  by  competi- 
tion, and  much  of  it  is  still  so  held.  But  English  economists, 
following  Adam  Smith  and  Ricardo,  have  always  assumed  that 
competitive  are  the  only  true  rents,  just  as  English  lawyers 
have  assumed  that  all  customary  rights  are  usurpations  on  the 
rights  of  the  lord  of  the  manor.  Both  opinions  had  their 
excuse  in  the  almost  if  not  quite  universal  ignorance  of  the 
historical  fact;  both  have  done  great  mischief  to  the  common 
people,  by  fostering  the  notion  that  the  traditional  customary 
rights  of  the  people  to  the  land  could  be  set  aside  without 
injustice. 

"  These  tenures  afford  confirmation  of  the  doubts  suggested  in  Sir 
Henry  Maine's  Village  Communities  respecting  the  historical  truth  of  the 
economic  theory  of  the  origin  of  rent.  Early  land- rents  were  not  com- 
petitive rents;  they  were  not  at  all  in  conformity  with  Mr.  Ricardo'a 
doctrine ;  they  bore,  for  the  most  part,  no  relation  to  the  fertility  of  the 
soil,  or  its  vicinity  to  market,  if  there  was  any  market  at  all.  .  .  .  Each 
manor  was,  as  it  were,  a  separate  territory,  inhabited  by  a  distinct  com- 
munity. There  was  no  competition  for  the  tenure  of  farms  from  without ; 
and  within  the  manor  the  sole  regulators  of  rent  were  the  arbitrary  will 
of  the  lord,  and  custom.  The  rent  of  the  villein  was  at  first,  in  theory  at 
least,  an  arbitrary  rent;  in  its  next  stage  it  was  a  customary  rent,  in 
labor  or  produce ;  in  a  third  stage  it  became  commuted  into  a  money- 
rent,  based  on  a  valuation  of  the  customary  service  or  payments  in  kind. 
In  the  book  before  us  [Blount's  Tenures  of  Lnnd]  we  have  many  exam- 
ples of  the  customary  rent  in  labor  and  in  kind,  and  of  the  commuted 
mouey-rent;  but  there  is  not  a  single  example  of  a  competitive  rent. 
Competitive  rents  only  began  with  enclosures  and  the  disruption  of  the 
old  manorial  community ;  and  customary  rents  survive  to  this  day  in 
many  a  manor,  in  defiance  of  economic  theory"  (  The  Athenaeum,  1874). 

The  only  early  instance  of  a  rent  not  fixed  by  custom  is  that  provided 
for  in  one  of  the  old  Irish  laws,  in  which  a  member  of  one  group,  be- 
coming an  outcast,  becomes  the  tenant  of  another.  Of  such  a  tenant  as 
large  a  rent  as  could  be  exacted,  might  be  justly  demanded  ;  but  of  a 
member  of  the  sept  itself  only  a  fair  (i.  e.,  a  customary)  rent  could  be 
exacted. 

§  100.  Mr.  Ricardo  is  wrong  in  his  very  first  premise.    "  The 


100  ELEMENTS    OF    POLITICAL    ECONOMY. 

elements  of  \alue  to"  the  first  settlers  of  a  new  country  '*  are 
not  the  resources  that  are  capable  of  development  through  in- 
dustry and  enterprise,  but  those  which  offer  the  readiest  supply 
of  the  necessaries  of  life  "  (J.  H.  Burton).  They  do  not  begin 
with  the  best  soil,  and  afterwards  proceed  to  that  which  is  worse, 
however  natural  and  reasonable  it  may  seem  to  assume  that  they 
do  so.  The  best  soil  is  usually  not  known  to  them  as  such ; 
even  if  it  were,  it  is  nearly  always  inaccessible  to  them.  Through 
its  very  wealth,  it  is  not  unusually  covered  with  timber,  whose 
clearance  is  impossible  to  them.  More  commonly  it  is  marshy, 
and  requires  what  would  be  to  them  a  vast  expenditure  of  labor 
to  drain  it.  It  lies  in  the  lower  parts  of  the  country,  to  which 
the  aqueous  circulation  has  been  for  ages  carrying  down  the 
richest  elements  of  the  soil.  It  is  infested  with  malarias,  bred 
of  vegetable  decay.  It  is  utterly  devoid  of  those  natural  facili- 
ties for  defence,  which  in  most  situations  are  imperiously  neces- 
sary to  the  settler. 

The  progress  of  civilization  in  all  ages,  therefore,  has  been 
from  the  thin  and  poor  soils  high  up  the  rivers  to  the  richer 
soils  that  lie  nearer  their  mouths.  The  retrogression  of  civiliza- 
tion has  been  the  abandonment  of  the  richer  soils  and  the  re- 
treat up  the  hillsides  to  those  that  are  lighter  and  less  fertile. 

The  next  chapter  gives  the  historical  proofs  of  these  facts,  and  of  the 
true  law  of  settlement. 

The  great  means  that  has  enabled  men  to  pass  from  the  poorer 
soils  to  the  richer  is  the  power  of  cooperation  that  increases  with 
the  growth  of  numbers,  unless  some  artificial  obstacle  has  been 
interposed  to  prevent  it.  The  sudden  decline  of  numbers,  or  the 
diminution  of  the  power  of  association,  has  had  the  effect  of 
driving  men  back  from  the  land  that  richly  repays  the  labor 
expended  upon  it,  to  the  soil  that  furnishes  natural  drainage, 
that  can  be  ploughed  with  a  crooked  sapling  and  harrowed  with  a 
thorny  bush.  The  labor  expended  upon  such  soil  is  slightly 
repaid;  the  crop  reaped  is  therefore  dear;  but  necessity  has  no 
choice. 


CHAPTER  SIXTH. 

The  National  Economy  op  Land  {continued):    How  the 
Earth  was  Occupied. 

§  101.  The  historical  refutation  of  Mr.  Ricardo's  theory, 
which  is  presented  by  the  history  of  the  settlement  of  the  various 
countries  of  the  earth,  was  first  given  to  the  world  by  Mr.  H.  C. 
Carey  in  his  book  The  Fast,  the  Present  and  the  Future  (1848). 
It  is  worthy  of  study,  not  only  as  a  refutation  of  a  dismal  theory 
of  the  destiny  of  mankind,  but  for  the  light  it  casts  upon  the 
economic  side  of  the  world's  history,  and  indirectly  upon  other 
sides  also.  It  might  be  easily  and  fairly  elaborated  into  an 
economical  history  of  the  earth,  for  that  history  is  nothing  but 
the  story  of  man's  victory  over  nature's  resistance  and  the  pro- 
gressive mastery  of  her  manifold  utilities. 

§  102.  The  theory  that  we  are  discussing  was  devised  to  ex- 
plain the  condition  of  Great  Britain,  but  no  English  antiqua- 
rian would  have  given  such  an  account  of  the  settlement  of  the 
country.  When  the  Romans  invaded  England,  it  was  at  most 
about  half  as  populous  as  at  tne  date  of  the  Norman  conquest. 
"  The  woods  must  have  been  larger,  the  fens  had  not  been  par- 
tially reclaimed  and  made  accessible  by  causeways  j  some  of  the 
tribes  were  unacquainted  with  tillage;  the  beech  tree,  which 
doubled  our  food  for  swine,  had  not  been  introduced ;  half  the 
roots,  vegetables  and  fruits,  which  now  supplement  our  corn- 
crops,  had  not  passed  the  Channel,  and  the  great  roads  were  not 
yet  made  on  which  the  plenty  of  a  fortunate  district  could  be 
transported  to  parts  where  the  crops  had  failed.  The  stunted 
British  cattle,  whose  remains  we  constantly  disinter,  are  proof 
that  even  if  tillage  was  known,  a  large  portion  of  the  population 
lived  upon  milk.  The  best  peopled  parts  of  England  were  pro- 
bably those  which  were  most  open  and  easy  to  cultivate ;  the 
home  counties,  Norfolk  and  Suffolk,  and  the  south-western  coun- 
ties."    A  "mighty  sum  of  toil  has  transformed    the  country 

101 


102  ELEMENTS  OF   POLITICAL   ECONOMY. 

throughout  England.  The  fens  and  forests  are  a  mere  memory 
and  a  name;  foreign  trees  grow  in  our  hedge-rows;  it  is  difficult 
to  find  a  point  within  half  a  mile  of  which  a  road  does  not  run ; 
the  climate  has  been  modified  as  woods  have  been  felled  and 
marshes  drained ;  our  rivers  are  smaller  than  in  the  old  days. 
Thanks  to  these  labors,  and  to  those  marvellous  changes  in  agri- 
cultural science,  which  may  bear  comparison  with  any  triumphs 
of  mechanics,  England,  left  to  her  own  resources,  can  now 
support  four  times  the  population  that  the  country  contained 
under  Edward  TIL,  eight  times  our  number  at  the  period  of  the 
Norman  conquest,  and  perhaps  sixteen  men  for  one  whom  Caesar 
found  in  the  island." 

In  this  and  the  following  paragraphs  quotations  not  otherwise  credited, 
and  much  besides,  are  from  Mr.  C.  H.  Pearson's  Historical  Maps  of 
England,  with  Explanatory  Eanaya  (2d  edition,  London,  1870).  Mr. 
Pearson  tries  to  account  for  many  of  the  facts  by  military  and  politica* 
reasons,  having  no  knowledge  of  the  true  law  of  the  occupation  of  the 
land. 

§103.  The  Celtic  tribes  whom  the  Romans  found  in  the 
island  do  not  seem  to  have  been  either  numerous  or  powerful,  as 
the  invading  army  that  added  the  island  to  the  Roman  Empire 
numbered  but  30,000  men.  The  home  of  the  several  tribes  is 
in  every  case  but  one  uncertain,  but  they  seem  to  have  been  con- 
fined to  the  hills  of  the  north  and  to  the  hill  system  of  the  south 
and  west  coasts,  which  opposes  its  cliffs  to  the  currents  from  the 
Atlantic,  and  is  divided  from  the  rest  of  the  island  by  the  old 
Roman  military  road  from  London  through  Chester,  which  the 
Saxons  called  Watling  Street. 

The  monumental  remains  of  the  ante-Roman  epoch  indicate 
this.  "  The  earliest  grave  mounds  are  mostly  found  in  the 
mountainous  districts  of  the  land, — among  the  hills  and  fast- 
nesses ;  the  later  [Roman  and  Saxon]  overspreading  hill,  valley 
and  plain  alike.  Thus  in  Cornwall,  in  Yorkshire,  in  Derbyshire 
and  in  Dorsetshire,  in  Wiltshire  and  many  other  districts,  the 
earliest  interments  are  or  have  been  abundant;  while  the  later 
ones,  besides  being  mixed  up  with  them  in  the  districts  named, 


CELTIC   OCCUPATION   OF   ENGLAND.  103 

are  spread  over  every  other  county.  In  the  counties  just 
named  Celtic  remains  more  abound  than  those  of  any  other 
period.  In  Dorsetshire,  for  instance,  Hhat  county,'  as  the 
venerable  Stukelcy  declares,  'for  sight  of  barrows  not  to  bo 
equalled  in  the  whole  world,'  the  early  mounds  abound  on  the 
downs  and  the  lofty  Ridgeway,  an  immense  range  of  hills  of 
some  forty  miles  in  extent, — while  those  of  a  later  period  lie  in 
other  parts  of  the  county.  In  Yorkshire  again  they  abound 
chiefly  in  the  wolds;  and  in  Cornwall  on  the  highlands.  The 
same  again  of  Derbyshire,  where  they  lie  for  the  most  part 
scattered  over  the  wild  mountainous  region  of  the  Peak, — a 
district  occupying  nearly  one-half  of  the  county,  and  containing 
within  its  limits  many  towns,  villages  and  other  places  of 
extreme  interest.  In  this  it  resembles  Dorsetshire,  for  in  the 
district  occupied  by  the  Ridgeway  and  the  downs  arc  very  many 
highly  interesting  and  important  places.  It  is  true  that  here 
and  there  in  Derbyshire,  as  in  other  counties,  an  early  grave 
mound  exists  in  the  southern  or  lowland  portion  of  the  county. 
.  .  .  There  are  districts  where  there  is  scarcely  a  hill  even  in 
that  land  [of  hills]  where  a  barrow  does  not  exist  or  is  not 
known  to  have  existed." 

See  Grave  Mounds  and  their  Contents,  by  Llellwyn  Jewett.     London, 
1870. 

§104u  West  of  Watling  Street  lay  (I)  the  ancient  kingdom 
of  Cornwall^  which  must  have  been  densely  peopled,  as  we  learn 
from  the  Roman  lists  of  towns,  the  traces  of  ancient  agriculture 
and  the  abundance  of  ancient  remains.  Here  is  the  seat  of 
the  events  now  clothed  in  poetry  in  the  Arthur-Sagas.  The  land 
is  now  mostly  abandoned  by  the  farmer  to  the  fisherman  and  the 
miner.  (2)  Wales,  whose  mountains  were  fought  for  as  a  prize 
by  the  two  great  branches  of  the  Celtic  race.  (3)  The  Welsh 
kingdom  of  Strathclyde,  which  includes  the  Galwegian  district 
of  Scotland  and  the  lake  district  of  England.  When  the 
Roman  occupation  ceased,  we  find  the  Celts  confined  to  this  dis- 
trict and  the  south  coast.  Their  literature  "  shows  no  acquaint- 
ance with  the  country  east — let  us  say — of  the  second  degree  of 


104  ELEMENTS   OF   POLITICAL   ECONOMY. 

longitude,  beyond  what  a  half-educated  yeoman  now  might  have 
of  America.  .  .  .  Except  perhaps  in  one  case  there  is  no 
authentic  tradition  of  war  with  the  Saxons  or  Angles  in  that 
region,  or  of  British  sovereignty  there.  The  single  exception  is 
that  of  Kent."  And  yet  the  race  is  remarkably  tenacious  of 
'  traditions.  It  carried  the  Cornish  Arthur-Sagas  into  Brittany ; 
the  Irish  Fingal-Sagas  into  Scotland.  It  knew  little  or  nothing 
of  the  east,  of  the  rich  lands  containing  nearly  all  the  wheat- 
fields  of  England,  while  the  west  is  devoted  to  grazing.  What 
tribes  were  found  there  by  the  Romans  were  few  and  scattered. 
It  was  therefore  open  to  Roman  colonization,  and  a  mixed  multi- 
tude of  Roman  citizens  and  continental  peoples  was  transplanted 
thither.  Seventy  thousand  Roman  citizens  are  said  to  have 
been  killed  in  the  massacres  by  which  Boadicea  began  her  revolt. 
This  was  the  region  that  fell  so  easily  into  the  hands  of  the 
Grerman  tribes,  and  after  a  few  struggles  became  the  site  of 
Saxon  kingdoms.  As  the  Saxons  pressed  westward  they  en- 
countered a  fiercer  resistance,  and  repaid  it  by  enslaving  the 
conquered  people.  At  Domesday  the  percentage  of  slaves  in 
the  north  and  east  was  but  3  J  per  cent. ;  in  the  five  south- 
western counties  16  to  17  per  cent,  j  and  the  intermediate 
degrees  of  serfage  hold  the  same  proportion.  The  west  was  the 
land  desired  by  Saxon  as  well  as  Celt ;  its  ranges  of  hills,  that 
rise  to  mountains  as  they  approach  the  sea,  were  the  subject  of 
protracted  conflict,  and  it  was  the  kingdom  of  Wessex  that  rose 
to  such  eminence  that  its  king  became  Bretwalda  or  sovereign 
of  England.  "■  All  the  energy  and  enterprise  of  the  Saxon 
name  flowed  naturally  towards  the  west,  and  from  the  district  of 
the  West  Saxons,  at  first  only  embracing  Hampshire  and  a  part 
of  Wiltshire,  went  out  all  the  conquering  expeditions  that 
wrested  not  only  the  south-west  and  the  valley  of  the  Severn, 
but  the  more  southern  of  the  Midland  counties  from  the 
Britons.'' 

§  105,  The  early  isolation  of  the  Saxon  kingdoms  as  of  the 
Celtic  tribes  was  largely  due  to  the  great  lines  of  forest  that  ran 
across  the  country,  and  to  the  fens  that  covered  much  of  its 


THE  SAXONS  IN  ENGLAND.  105 

surface.  To  the  former  (as  greatly  increasing  the  annual  rain- 
fall) the  existence  of  the  latter  was  largely  due.  *'  The  clouds 
which  at  present  pass  over  our  heads  and  break  in  another 
country  or  over  the  sea,  were  arrested  by  the  simplest  natural 
agencies;  and  the  water  that  now  flows  down  in  a  thousand 
drains  to  the  river,  was  preserved  in  marshes  and  lakes,  which 
in  turn  sent  back  what  they  had  received  in  dank  exhalations." 
The  deflections  of  the  Roman  roads  show  that  these  were  among 
their  chief  dijQBcultics  of  engineering,  while  they  show  readiness 
to  run  over  a  hill  instead  of  round  it.  In  Saxon  times  these 
obstacles  isolated  closely  related  tribes,  and  forced  them  to 
advance  from  east  to  west,  and  to  occupy  the  poorer  soils  on  the 
high  moorlands  and  the  mountain-sides,  where  traces  of  the 
most  ancient  occupants  are  visible.  We  find  the  Saxon  Saint 
Cuthbert  praised  because  in  his  missionary  tours  "he  was  wont 
chiefly  to  go  through  those  places  and  to  preach  in  those  ham- 
lets which  were  high  up  on  rugged  mountains,  frightful  to  others 
to  visit,  and  whose  people  by  their  poverty  and  ignorance  hin- 
dered the  approach  of  teachers.  He  went  out  from  the  monas- 
tery often  a  whole  week,  sometimes  two  or  three,  and  often  also 
for  a  whole  month  would  not  return  home,  but  abode  in  the  wild 
places  "  and  gave  them  lessons  in  husbandry  and  in  finding  and 
saving  water  (Hughes's  Alfred  the  Greaty  pp.  28-9). 

§106.  Throughout  early  English  history  the  lands  beyond 
the  Humber  are  slightly  or  not  at  all  connected  with  the  southern 
shires.  Of  the  midland  shires,  now  the  most  fertile  grain-lands  in 
the  island,  we  hear  next  to  nothing.  ''  The  map  of  Saxon-Eng- 
land is  singularly  bare  for  that  midland  district,  and  the  few 
names  that  mark  it  are  mostly  of  towns  which  Edward  the  Elder 
founded  as  a  military  frontier.  Few,  indeed,  are  the  charters 
that  record  gifts  of  land  in  its  rich  pastures;  scanty  and  late 
the  names  of  monastic  foundations  that  sprang  up  in  it." 
"  A  great  district  popularly  called  the  desert  stretched  from 
Durham  through  the  West  Riding  [of  Yorkshire]  to  the  Peak 
[in  Derbyshire ;]  and  to  a  period  as  late  as  the  twelfth  century, 
contained  no  town  of  importance.  .  .     The  site  of  Durham  was 


106  ELEMENTS   OF   POLITICAL   ECONOMY. 

occupied  by  a  thick  wood  in  the  twelfth  century.  Down  to  a 
much  later  time,  a  lamp  used  to  be  hung  from  the  old  steeple  of 
All  Saints,  York,  to  guide  travellers  across  the  forest  of  Graltres. 
The  Domesday  Survey  tells  us  that  in  Derbyshire  five  '  hundreds ' 
out  of  six  were  heavily  wooded ;  and  that  in  Lancashire  a  quar- 
ter of  a  million  of  acres  was  covered  with  a  network  of  aense 
woods."  With  the  Normans  begins  a  new  era  for  these  mid- 
land shires.  "  Generally  the  north  of  England,  Kent  and  Glou- 
cestershire, were  the  parts  most  thickly  peopled  under  the 
Romans,  while  under  the  Saxons  Wessex  and  the  eastern  coun- 
ties were  on  the  whole  the  best  governed  and  developed.  .  . 
From  Derby,  with  its  one  borough,  to  Wiltshire,  with  at  least 
eight  and  perhaps  sixteen,  or  Suffolk  with  six,  is  a  great  ascent. 
But  it  points  to  different  conditions  of  country."  "  With  the 
Norman  dynasty  came  new  conditions  of  national  life.  Wiltshire 
and  Somersetshire  declined  in  relative  importance.  .  .  Under 
King  John  Lincolnshire  alone  contributed  a  fourth  of  the 
exports  between  Newcastle  and  the  Land's  End.  The  mid- 
land districts  of  England  were  now  neither  desolate  nor  mar- 
tial." Yet  we  still  find  districts  now  fertile  named  in  mediaeval 
history  as  morasses  which  threatened  the  destruction  of  armies ; 
and  the  rich  grain-fields  of  South  Lancashire  were  in  the  reign 
of  Elizabeth  a  quagmire  that  daunted  the  antiquary  Camden. 
Oliver  Cromwell  was  one  of  a  "  company  of  adventurers"  who 
undertook  to  drain  the  fen  of  Huntingdon  and  Cambridge  shires 
by  diking  the  channel  of  the  Ouse. 

Northumberland  during  the  Roman  period  was  densely  set- 
tled ;  Roman  remains  are  numerous ;  Roman  cities  were  fre- 
quent and  of  great  size  on  its  "  naturally  sterile  "  soil.  It 
afterwards  sank  into  comparative  unimportance.  The  eastern 
lowlands  of  Scotland  were  at  first  an  outlying  part  of  this  king- 
dom ;  the  castle  of  Edinburgh  is  buijt  on  the  site  of  a  North- 
umbrian fortress  designed  to  defend  the  northern  frontier. 

§  107.  The  earliest  history  of  the  kingdom  of  Scotland  goes 
back  to  the  occupation  of  the  Western  Highlands  by  Scotch 
tribes  from  the  north  of  Ireland  and  their  subjugation  of  the 


SCOTLAND   AND   ITS   ISLANDS.  107 

Picts.  But  tlie  prehistoric  remains,  such  as  the  subterranean 
dwellings  and  villages  on  the  upper  reaches  of  the  river  Don  in 
the  slopes  of  the  Highlands,  go  still  farther  back.  "  The  coun- 
try is  crowded  with  hill-forts,  small  and  great;  they  may  bo 
counted  by  hundreds.  They  consist  of  mounds  of  earth  or 
Btones,  or  both,  running  round  the  crests  of  hills."  Every  spur 
of  the  Cheviots  is  crowned  with  remnants  of  old  fastnesses  whose 
builders  are  unknown  to  us. 

As  to  the  Irish  occupation  of  the  Highlands  it  has  well  been 
said  that  "  one  acquainted  with  the  agricultural  resources  of  the 
north  of  Ireland  at  the  present  day,  might  question  the  induce- 
ment of  a  people  to  leave  that  region  for  the  sake  of  settling  in 
Western  Scotland.  But  it  is  observable  of  the  Celts  as  of  other 
indolent  races,  that  the  elements  of  value  to  them  are  not  the 
resources  capable  of  development  through  industry  and  enter- 
prise, but  those  which  oflfer  the  readiest  supply  of  some  of  the 
necessaries  of  life.  .  .  The  geological  character  of  the  country 
would  supply  them  with  a  limited  quantity  of  alluvial  soil  for 
immediate  cultivation.  It  was  found  on  the  deltas  of  the  moun- 
tain streams,  on  the  narrow  straths  around  their  margin,  and 
occasionally  in  hollows  containing  alluvial  deposits,  which  might 
have  been  the  beds  of  ancient  lakes.  These  patches  of  fruitful 
ground  the  first  immigrants  would  find  ready  for  use.  Modern 
agriculture  has  indeed  been  able  to  add  very  little  to  their  area, 
and  has  wisely  determined  that  sheep-farming  is  the  proper  use 
of  those  tracts  of  mountains  among  which  the  alluvial  patches 
are  thinly  scattered.  It  is  a  curious  coincidence  worth  remem- 
bering, that  those  very  lands  in  Northern  Ireland  which  the  an- 
cestors of  the  Scots  Highlanders  abandoned,  were  in  later  times 
sought  and  occupied  by  Scots  Lowlanders  as  a  promising  field 
of  industrial  enterprise." 

See  Burton'6  History  of  Scotland,  Chapter  V.  (Edinburgh,  1873). 

As  in  English  history,  we  find  a  Celtic  kingdom  (Strathclyde) 
occupying  the  western  hills  and  Cumberland,  while  the  more 
fertile  Lothians  lie  open  to  the  invader  and  yield  to  the  Teutons 


108  ELEMENTS   OF   POLITICAL   ECONOMY. 

with  hardly  a  struggle.  But  even  in  the  Lothians  the  richer  soils 
— as  along  the  Tweed — are  of  more  recent  occupation  and  were 
forests  and  swamps  two  centuries  ago. 

§  108.  The  comparatively  bare  and  now  insignificant  islands 
that  lie  around  the  coast  were  once  prizes.  The  Romans  seized 
the  Orkneys  and  perhaps  established  a  garrison  there,  and  the 
remains  of  cyclopean  works  attest  a  still  earlier  occupation  of 
the  Islands.  In  the  Ossianic  traditions  they  formed  a  powerful 
kingdom.  In  the  middle  ages  they  were  pledged  to  the  King 
of  Norway  as  security  for  a  sum  of  money  that  would  now 
more  than  purchase  their  fee  simple.  To  the  west  lie  the  far 
moie  barren  Hebrides,  which,  with  the  Isle  of  Man,  Dublin  and 
the  south-east  of  Ireland,  once  formed  a  powerful  Danish  king- 
dom. These  islands,  once  "  rich  and  powerful,''  we  find  after- 
wards "  sinking  into  poverty,"  while  the  others  have  merely 
*'  preserved  a  respected  position  in  the  British  Empire,  as  main- 
taining a  valuable  and  industrious  population." 

The  Duke  of  Argyle,  President  of  the  Cobden  Club,  in  his 
book  about  lona  tells  us  the  story  of  the  settlement  of  that 
island  and  the  adjacent  highlands.  "  At  a  time,"  he  says, 
*^when  artificial  drainage  was  unknown,  and  in  a  rainy  climate, 
the  flats  and  hollows,  which  are  now  generally  the  most  valuable 
portions  of  the  land,  were  occupied  by  swamps  and  moss.  On 
the  steep  slopes  alone,  which  ofi*ered  natural  drainage,  was  it 
possible  to  raise  cereal  crops.  And  this  is  one  source  of  the 
error  which  strangers  so  often  make  in  writing  on  the  High- 
lands. They  see  the  marks  of  the  plough  high  up  upon  the 
mountains,  where  the  land  is  now  very  wisely  abandoned  to  the 
pasturage  of  sheep  or  cattle;  and  seeing  this,  they  conclude 
that  tillage  has  decreased,  and  they  wail  over  the  diminished 
industry  of  man.  But  when  those  high  banks  and  braes  were 
cultivated,  the  richer  levels  below  were  the  haunts  of  the  otter 
and  the  fishing-places  of  the  heron.  Those  ancient  plough- 
marks  are  the  sure  indications  of  a  rude  and  ignorant  hus- 
bandry. 

'^  In  the  eastern  slopes  of  lona,  Columba  and  his  companions 


IRELAND   AND   NEW  ENGLAND.  109 

found  one  tract  of  land  which  was  as  admirably  fitted  for  the 
growth  of  corn,  as  the  remainder  of  it  was  suited  to  the  support 
of  flocks  and  herds.  On  the  north-eastern  side  of  the  island, 
between  the  rocky  pasturage  and  the  shore,  there  is  a  long 
natural  declivity  of  arable  soil,  steep  enough  to  be  naturally 
dry,  and  protected  by  the  hill  from  the  western  blast. 

"  And  so  here  Columba's  tent  was  pitched  and  his  Bible 
opened,  and  his  banner  raised  for  the  conversion  of  the 
heathen." 

§109.  Ireland  (as  that  best  of  judges  Arthur  Young  says), 
taken  acre  for  acre,  is  more  fertile  than  England.  Yet  in  her 
earlier  history,  when  the  whole  population  consisted  of  a  few 
hundred  thousands  gathered  into  clans,  its  "  pressure  upon  land 
and  food  "  caused  frequent  famines,  and  led  to  large  emigrations 
into  what  we  regard  as  the  poorest  parts  of  the  sister  island. 
Such  was  the  exodus  of  Scots  that  established  the  Celtic  king- 
dom of  Dularadia,  and  laid  the  foundation  of  Scottish  nation- 
ality. Such  also  was  the  invasion  and  occupation  of  North 
Wales  by  the  Gadhelic  or  Irish  kingdom  of  Gwynned,  just 
about  the  time  oF  the  Saxon  incursions  on  the  east.  • 

The  Scotch  and  English  colonies  in  the  north  had  a  long 
struggle  with  the  natural  obstacles  to  settlement,  among  which 
want  of  drainage  and  consequently  malaria  and  agues  were  the 
chief.  Within  the  memory  of  people  now  living,  large  districts 
have  been  brought  under  culture,  and  the  yield  of  the  land  im- 
mensely increased  wherever  the  density  of  population  was  such 
as  to  make  it  both  possible  and  profitable.  The  malarious 
type  of  disease — including  that  ofi"spring  of  the  union  of  hunger 
and  malaria,  typhus  fever — have  comparatively  disappeared. 

§  110.  Iti  America,  the  Pilgrim  Fathers  and  the  Puritan 
colonists  fixed  their  homes  on  the  barren  shores  of  Massachu- 
setts Bay  ;  and  even  when  they  penetrated  the  country  to  found 
new  commonwealths,  they  chose  high  and  dry  spots  like  New- 
port and  New  Haven.  The  richest  soils  under  cultivation  in  New 
England  were  reclaimed  within  fifty  years.  Other  lands,  quite 
as  rich,  if  not  richer,  lie  untilled,  while  old  mountain  settlements 


110  ELEMENTS    OF   POLITICAL   ECONOMY. 

in  Berkshire  county  and  other  districts  are  being  emptied  of 
their  inhabitants  and  ancient  farmhouses  left  untenanted.  But 
much  of  the  long-occupied  lands  have  grown  in  fertility,  as  agri- 
cultural methods  and  appliances  have  been  improved.  "  Ouir 
soil,"  says  Emerson,  "is  capable  of  as  great  and  increased  pro* 
ductiveness  as  that  which  England  has  attained.  Concord  is 
now  one  of  the  oldest  towns  in  the  country, — far  on  now  [1858] 
in  its  third  century.  The  selectmen  have  once  in  five  years  per- 
ambulated its  bounds,  and  yet  in  this  year  a  very  large  quantity 
of  land  has  been  discovered  and  added  to  the  agricultural  land, 
and  without  a  murmur  of  complaint  from  any  neighbor.  By 
drainage  we  have  gone  to  the  subsoil,  and  we  have  a  Concord 
under  Concord,  a  Middlesex  under  Middlesex,  and  a  basement- 
story  of  Massachusetts  more  valuable  than  the  superstructure. 
Tiles  are  political  economists.  They  are  so  many  young  Ameri- 
cans announcing  a  better  era  and  a  day  of  fat  things." 

Mr.  Emerson  sees  the  bearing  of  all  this,  for  he  adds:  "There  has 
been  a  nightmare  brought  up  in  England,  under  the  indigestion  of  the  late 
suppers  of  overgrown  landlords  and  loomlords,  that  men  bred  too  fast  for 
the  powers  of  the  soil, — that  men  multiplied  in  a  geometrical  ratio,  whilst 
corn  only  in  an  arithmetical.  The  theory  is  that  the  best  land  is  taken 
up  first.  This  is  not  so,  as  Henry  Carey  of  Philadelphia  has  shown,  for 
the  poorest  land  is  the  first  cultivated,  and  the  last  lands  are  the  best 
lands.  It  needs  science  to  cultivate  the  best  lands  in  the  best  manner. 
Every  day  a  new  plant,  a  new  food  is  found.  Thus  political  economy  is 
not  mean,  but  liberal,  and  on  the  pattern  of  the  sun  and  sky ;  it  is  coin- 
cident with  love  and  hope.  It  is  true  that  population  increases  in  the 
ratio  of  morality,  and  the  crops  will  increase  in  like  ratio  " 

§  111.  In  New  York  the  first  lines  of  settlement  ran  along 
the  dry  and  sandy  hills  from  Manhattan  Island  and  the  High- 
lands to  the  Mohawk  valley.  The  settlements  on  the  edge  of 
that  beautiful  and  fertile  region  are  much  older  than  those  within 
it.  Rich  and  fertile  districts  like  Greneva  have  not  a  history  of 
more  than  seventy  years,  while  the  more  remote  and  less  fertile 
lands  along  the  Pennsylvania  line  were  settled  very  early,  their 
elevation  and  their  consequent  exemption  from  malaria  being  an 
especial  recommendation.  The  New  York  farmer  of  our  days" 
finds  that  "  knocking  the  bottom  out  of  a  swamp  "  is  one  of  the 


MIDDLE  AND   WESTERN   STATES.  Ill 

most  i^rofitable  things  he  can  put  his  hand  to,  and  his  lessknow- 
ing  neighbors  stare  at  the  crops  that  follow. 

Neio  Jersey  was  preferred  by  the  first  Quaker  settlers  to  the 
west  bank  of  the  Delaware,  because  of  the  abundance  of  her 
light,  sandy  soils,  which  were  the  more  easily  got  at.  Hundreds 
of  their  clearings,  which  have  long  been  abandoned,  may  be 
found  in  these  districts.  The  Swedes  across  the  river  followed 
suit.  They  built  Christina,  Lewistown,  and  other  towns  of 
Delaware  that  have  become  decayed  and  insignificant  places. 

§  112.  Penn  had  the  same  preference  for  high  land.  His 
first  choice  for  the  site  of  Philadelphia  was  twelve  miles  farther 
north.  The  early  maps  of  the  province  show  us  miles  of  small 
farms  running  from  the  city  along  the  tops  of  the  ridges,  while 
the  richer  and  lower  lands  on  each  side  are  marked  as  uncleared 
and  uncultivated.  Hence  the  origin  of  the  Ridge  Road.  A  large 
part  of  the  banks  of  our  rivers  above  the  city,  are  still  unsafe  as 
building-sites,  while  below  us  lie  undrained  swamps  that  will  yet 
be  the  farm-gardens  of  our  city.  Much  of  the  best  land  in  the 
interior  of  the  state  is  still  unoccupied,  especially  in  the  valley 
of  the  Susquehanna,  while  comparatively  barren  places  on  the 
slopes  of  the  Alleghenies  and  its  related  ranges  were  settled  at 
a  very  early  date.  The  old  roads  of  the  state  go  twisting  about 
as  if  in  search  of  hills  to  clamber  along — even  in  the  limestone 
valleys,  where  there  is  no  malaria — while  the  new  ones  run 
along  the  streams  and  through  the  valleys. 

The  vast  immigration  from  the  north  of  Ireland  that  went  on 
during  last  century  found  homes  in  the  Alleghenies  and  their 
spurs,  which  they  entered  through  Pennsylvania  and  North  Caro- 
lina, and  then  spread  over  the  whole  Apalachian  system  from 
what  are  now  the  Oil  Regions  to  Huntsville  in  Northern  Ala- 
bama. Their  choice  was  not  prompted  by  want  of  better  lands, — 
for  such  lay  unreclaimed  on  both  sides  of  the  mountains ; — nor 
by  indolence  (as  Mr.  Burton  charges  upon  the  Irish  settlers  of 
the  Scotch  Highlands),  for  no  race  is  more  industrious ; — nor  by 
any  special  safety  of  their  position,  as  they  had  to  bear  for  half 
a  century  the  brunt  of  our  Indian  wars.     They  took  the  lands 


112  ELEMENTS   OF   POLITICAL   ECONOMY. 

that  lay  most  open  to  them,  as  did  their  brethren,  who  passed 
by  Maine  to  settle  the  Granite  State. 

§  113.  The  same  course  of  settlement  may  be  traced  in  every 
Western  state.  Everywhere  the  rich  valley-lands  are  avoided 
as  the  seat  of  malaria.  In  Wisconsin  the  first  settlement  was 
made  in  the  patch  of  highlands  called  the  Blue  Mound,  and  the 
lines  of  settlement  ran  out  along  the  sandy  hills  as  in.  the  east. 
The  richest  and  the  most  fertile  spots  on  the  prairies  were  in 
earlier  times  the  sloughs  or  "  wet  prairies  " — the  terror  of  travel- 
lers, but  now  under  combined  and  patient  exertion  "  fair  as  the 
garden  of  the  Lord.''  One  such  in  Southern  Illinois,  occupied 
by  Paisley  weavers  turned  American  farmers,  recalls  the  most 
carefully  tilled  bits  of  the  British  Islands.  This  whole  district, 
commonly  known  as  Egypt,  and  spreading  from  the  Mississippi 
far  east  of  the  Wabash,  is  perhaps  the  richest  in  the  whole 
North.  Yet  the  Southern  planters  on  their  way  to  occupy  Mis- 
souri, passed  it  by  in  disdain,  and  left  it  to  "  poor  whites  "  of  the 
South,  who  occupy  such  dry  and  sandy  ridges  as  they  find 
accessible,  where  the  rudest  agriculture  suffices  to  supply  their 
very  primitive  wants.  The  rich  creek  bottoms  are  inaccessible 
to  its  rude  and  scanty  population,  who  have  hardly  any  notion 
of  their  value  and  no  capital  sufficient  to  master  them.  A  man, 
whoso  lands  if  rightly  tilled  would  feed  a  New  England  town, 
will  live  in  a  log-hut  of  two  rooms,  with  a  loom  and  spinning- 
wheel  on  the  "  stoop,''  and  ride  to  a  Hard  Shell  church,  with  a 
saddle  of  raw  hide  and  stirrups  of  straw.  Every  family  has  its 
package  of  quinine,  and  "  the  Egyptian  shakes  "  are  a  proverb. 

If  we  ascend  the  various  branches  of  the  Mississippi,  we  find 
tillage  approaching  the  river  if  the  population  is  dense,  receding 
from  the  river  to  the  barer  lands  that  furnish  natural  drainage 
if  it  be  sparse. 

Descending  the  river  we  reach  the  vast  levees  that  protect  the 
richest  plantations  of  the  continent  and  testify  to  the  growth  of 
man's  power  to  command  the  services  of  nature  with  the  in- 
crease of  numbers.  East  of  this  southern  valley  lie  the  South 
Atlantic  States.     In  North  Carolina  the  richest  lands  are  still 


SUMMARY   VIEW.  113 

undrained,  while  labor  is  expended  upon  others  that  yichl  fVom 
three  to  five  bushels  of  wheat  to  the  acre.  The  Cotton  States 
contain  millions  of  acres  still  inaccessible  to  agriculture  through 
lack  of  population,  because  a  large  outlay  of  intelligently  di- 
rected labor  would  be  required  to  occupy  them. 

In  Texas  the  first  Spanish  colony  at  Bexar  and  the  first 
American  colony  at  Austin,  high  up  on  the  Colorado,  were  both 
settled  by  men,  who  passed  by  millions  of  acres  of  better  land  aa 
inaccessible,  to  reach  an  exceptional  elevation. 

§  114.  Looking  at  the  entire  area  of  the  earth's  surface,  we 
find  (1)  that  no  nation  occupies  a  territory  incapable  of  support- 
ing its  actual  or  even  its  probable  population.  Norway  comes 
nearest  to  forming  an  exception,  but  the  Scandinavian  peninsula 
is  manifestly  designed  for  the  home  of  one  nationality.  Sweden 
raises  more  cereals  than  her  people  eat,  and  a  very  considerable 
area  of  her  arable  lands  is  still  covered  with  dense  forests. 
England  is  clearly  no  exception;  she  is  capable  of  producing 
on  her  soil  four  times  as  much  food  as  her  people  use ;  but  her 
agriculture  lags  far  behind  the  general  average  of  her  skill  in 
the  invention  of  better  methods  and  in  the  application  of  scien- 
tific principles. 

(2)  The  pressure  of  population  upon  subsistence  and  upon 
the  land  exists  in  sparsely-settled  regions,  and  there  only.  It  is 
a  providential  agency  to  stir  men  to  greater  exertions  and  wiser 
methods,  and  these  exertions  are  always  abundantly  rewarded. 

(3)  The  richest  areas  of  the  earth's  surftice  lie  still  unoccu- 
pied, and  in  many  cases  the  richest  districts,  within  national 
boundaries  whose  population  is  dense  enough  to  take  possession 
of  them,  are  untilled  and  undrained. 

(4)  The  area  of  culture  may  be  indefinitely  extended  in  both 
directions.  It  is  now — we  may  say — the  belt  of  land  that  lies 
between  districts  that  are  too  poor  and  districts  that  are  too  rich 
to  repay  culture.  The  former  as  well  as  the  latter  may  be  mas- 
tered, as  the  scieuces  advance  in  their  mastery  of  the  secrets  of 
nature;  chalk  downs  and  sandy  deserts  may  be  transformed  into 
fair  garden  fields  and  orchards  at  the  touch  of  nran,  as  great 

8 


114  ELEMENTS   OF    POLITICAL   ECONOMY. 

natural  forces  and  resources  are  brought  into  his  service.  The 
wilderness  and  the  solitary  place  shall  be  glad,  and  the  desert 
shall  rejoice  and  blossom  as  the  rose. 

(5)  The  value  of  the  land  of  a  country  is  chiefly — or  in 
truth  entirely — due  to  the  labor  that  has  been  wisely  expended 
upon  it,  and  is  proportional  to  that.  The  price  of  a  Belgian  farm, 
for  instance,  is  twelve  times  as  great  as  that  of  the  same  amount 
of  waste  land  in  the  same  country,  and  the  latter  brings  even 
that  nominal  price  only  because  (1)  it  furnishes  a  field  for  labor 
to  produce  utilities  possible  but  as  yet  non-existent ;  (2)  because 
the  labor  already  expended  on  other  adjacent  pieces  of  land, 
and  the  growth  of  numbers  and  of  the  power  of  association, 
have  made  it  possible  to  bring  this  one  under  tillage.  Were  the 
same  piece  of  land  to  be  transferred  to  the  Andes,  its  market 
value  would  be  nil. 

In  fine,  if  in  any  case  a  people,  with  the  strength  of  numbers 
and  the  strength  of  skill,  should  come  to  such  a  state  that  great 
wealth  should  be  found  side  by  side  with  deep  poverty  and  its 
accompaniments,  misery  and  sordid  vice,  the  cause  of  such  a 
state  of  things  is  not  to  be  sought  in  *'  the  pressure  of  popula- 
tion upon  land  and  food,"  but  in  bad  national  thrift.  Somebody 
is  to  blame  1 


CHAPTER  SEVENTH. 
The  National  Economy  op  Labor. 

§  115.  Tho  industrial  age,  in  which  national  economy  has 
become  a  science,  is  also  the  democratic  age,  in  which  the  govern- 
iug  class  are  no  longer  regarded  as  composing  the  state  or  possess- 
ing an  exclusive  right  to  direct  its  policy  to  the  promotion  of 
their  own  interests.  It  is  no  longer  possible,  therefore,  to  call  a 
nation  wealthy  and  prosperous  because  large  masses  of  capital 
are  in  the  hands  of  a  few  men,  if  the  great  body  of  the 
people  are  ill-fed,  ill-housed  and  ill-clothed,  or  struggling  on  the 
brink  of  pauperism.  The  prosperity  of  '*the  most  numerous 
class,  that  is,  the  poorest,"  is  coming  ever  more  to  the  front  as 
the  great  problem  of  modern  statesmanship. 

In  an  industrial  age  this  problem  resolves  itself  into  the 
question  of  the  rewards  of  labor.  Modern  governments  can  no 
longer  undertake  to  support  great  numbers  of  people  in  idleness 
on  the  produce  of  the  industry  of  other  classes,  as  was  done  in 
the  Greek  republics  and  the  Roman  Empire.  Those  others, 
with  the  advance  of  political  equality,  claim  equal  rights  and 
care.  The  aim  of  national  economy  is  therefore  to  secure  "  a 
fair  day's  wages  for  a  fair  day's  work,"  to  all  who  are  willing 
and  able  to  work. 

In  modern  industry,  the  operations  are  so  complex  in  method 
and  so  extensive  in  scale  that  unassisted  labor  would  be  unable 
to  undertake  them.  Those  who  by  their  savings,  or  by  the 
inheritance  of  other  men's  savings,  have  come  into  the  pos- 
session of  a  large  amount  of  the  results  of  past  labor,  natur- 
ally and  necessarily  take  the  work  of  organizing  industry  and 
directing  its  forces.  These  men  are  capitalists,  and  their  ac- 
cumulations are  called  capital. 

§  116.  Of  the  net  product  of  the  joint  application  of  labor 
and  capital,  what  proportion  should  fall  to  labor  and  what  to 

115 


116  ELEMENTS    OF   POLITICAL   ECONOMY. 

capital  ?     Is  there  a  natural  and  necessary  rate  of  distribution 
or  does  it  vary  arbitrarily  according  to  thfi  contract  made  ? 

The  English  economists  generally  accept  the  former  alterna- 
tive ;  they  believe  that  there  is  a  natural  and  necessary  rate  of 
wages ;  that  no  efforts  of  the  workman  can  permanently  raise 
wages  above  that  rate,  and  no  efforts  of  the  capitalist  can  per- 
manently depress  them  below  it.  For,  say  they,  if  wages  be 
raised  above  the  natural  rate,  the  rate  of  increase  in  the  population 
will  be  accelerated,  and  after  a  time  the  number  of  workmen  will 
be  so  great  that  they  will  underbid  each  other  for  work,  and  the 
rate  will  be  depressed  again.  If  it  be  depressed  below  the  natural 
rate  by  this  or  any  other  cause,  then  the  rate  of  increase  of  the 
population  will  be  diminished,  and  the  labor  market  will  be 
scantily  supplied,  so  that  wages  must  rise.  Between  the  two 
extremes  of  this  oscillation,  there  is  a  middle  point  of  stability, 
— the  natural  rate  of  wages,  that  which  will  neither  accelerate  the 
growth  of  population  till  it  surpasses  the  growth  of  capital,  nor 
the  reverse.  This  natural  rate  is  the  amount  necessary  to  sup- 
ply to  the  unmarried  workman  the  real  necessaries  of  life,  and 
whatever  other  things  his  class  regard  as  such. 

The  theory  is  commonly  stated  in  another  form,  which  also 
accepts  a  natural  rate  of  wages,  and  one  which  is  reached  far 
more  swiftly.  All  the  money  in  a  country  that  is  available 
for  the  payment  of  labor  is  taken  in  the  mass  and  called  the 
wage  fund.  This  fund  is  divided  pretty  equally  among  all  the 
laborers  in  the  country.  The  apparent  inequalities  in  the  dis- 
tribution are  not  real ;  higher  wages  can  always  be  traced  to 
payment  for  undergoing  danger  or  doing  work  that  is  disagree- 
able or  discreditable,  or  work  that  involves  special  capacity  or 
preparation.  The  amount  of  the  fund  to  be  divided  depends 
upon  the  amount  of  capital  in  circulation.  The  rate  of  division 
depends  upon  the  number  of  claimants.  The  workingmen  have 
no  power  to  increase  the  amount  of  the  fund,  bat  they  can  limit 
the  number  of  those  among  whom  it  is  divided,  and  on  their 
doing  so  depends  their  welfare  as  a  class. 

This    theory  in  both  its  shapes  grows  out  of  the  supposed 


THE    HADES    OF    LABOR.  117 

*'  law  of  population,"  and  must  stand  or  full  with  that.  Like 
that,  its  motive  is  to  show  that  the  misery  of  the  workiiij;  classes 
is  not  to  be  attributed  to  any  mismanagement  on  the  part  of  the 
ruling  class,  but  to  the  operation  of  natural  and  unavoidable 
laws.  Its  verdict  is,  "  Nobody  to  blame,"  when  the  growth  of  a 
nation  in  wealth  and  numbers,  and  the  distribution  of  wealth 
among  those  numbers,  do  not  go  on  together. 

The  first  form  of  the  theory  is  fully  refuted  by  the  ascer- 
tained fact  that  the  poorest  classes  are  the  most  thriftless, 
and  the  least  likely  to  take  thought  for  the  future.  The  second, 
by  the  proofs  that  workingmen  actually  have,  by  combination, 
raised  the  rate  of  wages,  without  any  such  increase  of  circula- 
ting capital,  or  the  resulting  "  wage  fund,"  as  is  here  demanded 
as  a  preliminary  to  that  increase. 

The  facts  are  abundantly  given  by  Mr.  W.  T.  Thornton  (On  Labor, 
1870),  and  by  Mr.  ClifiFe  Leslie  {Si/atema  of  Land  Tenure,  1868). 

§  117.  If  the  English  theory  as  to  the  relations  of  labor  and 
capital  be  true,  then  there  is  no  hope  for  the  essential  improve- 
ment of  the  workingman's  condition  so  long  as  the  existing  order 
of  society  holds  its  ground.  What  labor  gains  on  one  side  it 
for  ever  loses  on  the  other,  and  as  often  as  it  rolls  the  Sisyphean 
rock — the  rate  of  wages — up  the  hill,  it  rolls  down  again  to 
crush  and  destroy  the  workman.  All  the  old  pictures  of  foiled 
effort,  with  which  the  Greeks  peopled  their  Hades,  become  but 
pictures  of  the  efforts  of  the  working  classes  to  raise  their  con- 
dition above  the  wretched  standard  called  "  natural  wages." 

Those  who  are  striving  to  rouse  the  working  classes  to  over- 
throw the  frame-work  of  modern  society  and  its  economic  basis, 
the  right  of  property,  are  not  slow  to  discern  this.  Thus  the 
leader  of  the  German  socialists,  Lasalle,  based  his  fierce  denun- 
ciations of  modern  civilization  and  its  proprietary  rights  upon 
the  recognised  doctrines  of  the  English  school,  claiming  to  be 
"equipped  with  all  the  knowledge  of  the  age"  on  this  subject. 
His  chief  opponent,  his  successful  rival  in  the  love  and  allegiance 
of  the  working  classes  of  Germany,  is  Schultze-Delitzsch,  who 
has  devoted  his  life   to  showing  the  working  classes  that  they 


118  ELEMENTS    OF    POLITICAL    ECONOMY. 

can  improve  their  condition  simply  by  removing  unnatural 
obstacles  to  improvement,  by  availing  themselves  of  the  great 
drift  of  society  towards  an  equality  of  condition,  and  without 
for  an  instant  lifting  their  hands  against  the  accumulations  and 
the  vested  rights  of  the  rich.  In  doing  so,  he  ranged  himself 
on  the  side  of  the  German-American  school  of  economists 
founded  by  List  and  represented  by  H.  C.  Carey,  telling  Herr 
Lasalle  that  if  he  had  taken  the  pains  to  go  over  the  whole  field 
he  would  have  found  better  teachers  and  better  principles  than 
those  of  Malthus  and  Ricardo. 

"  If  any  one  object,"  he  says,  "that  the  economical  principles  of  the 
writer  are  devoid  of  authority,  it  will  suffice  to  answer  that  these  princi- 
ples have  been  established  by  the  work  of  one  of  the  most  philosophic 
minds  of  our  epoch,  the  celebrated  American  economist,  Carey.  That 
work  is  entitled  Principles  of  Social  Science.  It  was  finished  in  1860 ; 
some  years  later  gave  us  a  German  translation  of  it  (MUnchen,  1863-4, 
published  by  E.  A.  Fleischmann).  We  commend  it  to  the  public  as  one 
of  the  most  eminent  publications  that  have  appeared'  in  this  branch  of 
human  knowledge. 

"  All  that  is  false  and  damnable  in  the  economic  theories  of  the  modern 
English  school,  especially  those  of  Ricardo  and  Malthus, — theories 
which  furnish  the  starting-point  for  the  thesis  defended  by  Lasalle, — there 
meets  with  a  triumphant  refutation;  and  it  is  truly  astonishing  that  our 
opponent,  *  armed  with  all  the  knowledge  of  the  age,'  had  not  even  known 
of  the  aforementioned  labors  of  the  eminent  man,  who,  during  the  last 
twenty  years,  has  discovered  a  great  number  of  truths  that  are  now  ac- 
cepted as  axioms  in  political  economy." 

John  Stuart  Mill,  in  his  Axitobiogra^ihy,  shows  us  that  the  gloomy  out- 
look for  the  future  of  the  majority  of  mankind,  presented  to  his  mind 
when  he  studied  the  world  through  the  spectacles  made  for  his  eyes  by 
Malthus  and  Ricardo,  led  him  to  at  least  approximate  to  the  theory  of 
the  St.  Simonian  socialists.  They  proposed  to  abolish  all  rights  of  in- 
heritance ;  to  reconstruct  the  government  out  of  the  ablest  men  in  each 
of  the  professions ;  to  make  the  state  everybody's  heir,  and  to  redis- 
tribute all  property  as  fast  as  its  present  possessors  died.  In  Mr. 
Mill's  Principles  in,  xiii,  §  2)  he  speaks  of  "the  industrial  system  pre- 
vailing in  this  country  and  regarded  by  many  writers  as  the  ne  plus  ultra 
of  civilization,"  as  "irrevocably  condemned,"  unless  it  prove  itself  com- 
petent to  sohe  the  population  question  by  bringing  sufficient  motives  to 
self-restraint  to  bear  upon  the  classes  "  dependent  on  the  wages  of  hired 
labor." 

§  118.  The  English  theory  that  the  power  of  competition 


liiE    LAW    OF    PARSIxMONY.  119 

fixed  Jill  the  status  of  industries,  and  tluit  all  things  found  their 
level,  led  to  the  inference — adduced  above — that  the  wages  of 
labor  arc  essentially  the  same  in  all  departments,  and  tliat  any 
difference  in  payment  could  be  traced  to  an  implied  payment  for 
facing  some  danger,  or  something  disagreeable  or  disgraceful  in 
the  work.  Closer  investigation  shows  us  that  custom  is  as  large 
an  element  as  competition  in  determining  the  rate  of  wages, 
although  the  latter  is  gaining  upon  the  former  steadily  in  modern 
society.  The  great  change  going  on  all  around  us  is  from  cus- 
tomary status,  that  fixes  the  rate  and  price  of  all  things  by 
tradition,  to  one  in  which  they  are  fixed  by  free  contract.  But 
the  change  is  anything  but  complete  in  any  department  of  life, 
and  as  to  wages  it  is  simply  impossible  to  say  why  some  classes 
of  work  are  paid  so  high  and  others  so  low.  To  give  a  reason 
for  the  difference  would  be  to  trace  to  reason  what  had  not  its 
origin  in  reason  j  or  if  it  ever  had,  it  was  in  a  past  so  distant 
that  we  cannot  reconstruct  it. 

§  119.  Capitalists  are,  of  course,  more  ready  than  workings 
men  to  listen  to  the  English  arguments  in  favor  of  the  necessity 
and  naturalness  of  a  low  rate  of  wages.  But  the  eflfort  to  keep 
the  workingraan  down  to  such  a  rate  ignores  the  very  nature  of 
the  instrument  that  is  to  be  used.  It  is  to  adopt  as  a  maxim  of 
economy  the  fundamental  falsehood  of  slavery, — that  a  man  may 
be  treated  as  a  thing.  The  law  of  parsimony  is  a  wise  one  in 
dealing  with  the  material,  but  not  with  the  workman.  Every 
needless  pound  of  iron  on  the  locomotive,  every  needless  pound 
of  coal  in  the  fire-place,  is  so  much  waste  of  the  moving  force. 
Every  unnecessary  ton  of  iron  on  the  girders  of  the  bridge 
merely  adds  to  the  weight  to  be  sustained,  without  proportionally 
increasing  the  strength  that  sustains  it.  So  in  regard  to  cost  of 
material ;  what  is  needless  is  waste. 

But  when  we  come  to  apply  the  law  of  parsimony  to  the  com- 
plex being  called  man,  we  discover  by  experience  that  there  are 
very  decided  limits  to  its  application.  Here  at  least  "  there  is 
that  scattereth  and  yet  increaseth,  and  there  is  that  withholdeth 
nu»re  than   is  meet,  and  it  teudeth   to  poverty."     The  lowest 


120  ELEMENTS    OE   POLITICAL   ECONOMY. 

wages  that  you  can  get  a  man  to  live  on,  will  not  get  the  best 
work  out  of  him.  Put  a  whole  people  on  such  wages,  and  keep 
#  them  there — if  you  can — for  two  or  three  generations,  and  you 
will  have  crushed  the  energy,  the  spirit,  the  heart  out  of  that 
people,  and  made  them  a  very  inferior  and  unprofitable  class  of 
workmen.  You  will  have  taken  away  from  the  great  mass  of 
them  the  means  of  advancing  in  intelligence ;  their  physical 
character  will  have  deteriorated  greatly  ;  their  social  morality — 
their  good-will,  and  public  spirit,  and  ready  helpfulness,  and 
brotherly  feeling — will  have  been  pretty  thoroughly  eliminated. 
Factories  will  be  full  of  the  inflammable  human  stuff,  to  which 
demagogues  furnish  the  spark.  The  stability  of  the  social  edifice, 
and  consequently  the  security  of  property,  will  be  endangered. 
Instead  of  cheerful,  pains-taking,  thrifty  work,  eye-service  alone 
will  be  rendered,  and  profits  will  suffer  from  waste  more  than 
they  would  from  high  wages. 

On  the  other  hand,  wages  that  put  heart  and  hope  into  a  man, 
that  make  him  feel  that  his  personal  efforts  and  his  best  work 
are  needed  to  keep  them  at  present  rates,  that  offer  him  the 
prospect  of  becoming  his  own  master  by  frugality,  that  enable 
him  to  educate  his  children  to  fill  a  place  like  his  own  intelli- 
gently, or  perhaps  to  rise  to  a  higher  place, — such  wages  are  in 
the  long  run  the  best  of  investments.  It  cannot  be  said  that  cap- 
italists any  more  than  workmen,  have  always  been  alive  to  this 
substantial  harmony  of  their  interests.  When  the  higher  rate 
of  wages  has  been  adopted,  it  has  too  commonly  been  after  a 
conflict  between  the  two  classes,  through  which  much  of  its 
good  effect  upon  the  workmen  has  been  destroyed. 

§  120.  Men  are  morally  responsible  for  the  terms  on  which 
they  purchase  labor.  When  the  workman  makes  his  contract 
singly,  the  capitalist  has  a  power  to  dictate  its  terms,  which 
does  not  exist  in  ordinary  transactions.  In  case  of  disagreement 
as  to  terms,  it  remains  to  be  seen  which  of  the  two  can  hold 
out  longest.  Labor  cannot :  the  laborer  would  starve.  Capital 
can  live  on  its  acciimulatious.  If  I  refuse  to  buy  the  baker's 
Wl',  bccuucsc   1  think  it  too  dear,  he  loses  but  little  in  waiting 


•       THE   WASTE   OF   SLAVERY.  121 

till  noon  for  another  customer.  I  have  therefore  no  means  of 
dictating  to  him.  But  "  labor  is  the  most  perishable  of  com- 
modities." He  who  cannot  sell  his  morning's  labor  before  noon, 
can  never  sell  itj  it  is  gone.  The  producer  of  other  commo- 
dities can  at  least  stop  producing,  and  lose  only  the  interest  on 
his  capital,  when  the  prices  are  unsatisfactory.  But  he  who  has 
labor  to  sell  cannot  stop  producing,  cannot  cease  to  offer  his 
single  commodity  for  such  price  as  he  can  get. 

§  12L  The  history  of  labor  shows  the  wisdom  of  generous 
dealing  with  the  laborer.  In  the  earliest  ages,  he  was  generally 
a  slave ;  but  it  was  found  that  slave  labor  was  dear  at  any  price. 
Homer  says : — 

"  The  day 

That  makes  a  man  a  slave,  takes  half  his  worth  away.** 

Pliny  tells  us  CoU  rura  ah  ergastiilis  pessimum  est,  et  quicquid 
agitur  a  desperantibus  (It  is  the  worst  possible  tillage  that  is 
carried  on  by  slaves,  nor  are  they  more  fit  for  any  other  sort  of 
work,  because  they  are  devoid  of  hope).  A  southern  slave- 
holder told  Frederick  Law  Olmstead  :  "  In  working  niggers  we 
must  always  calculate  that  they  will  not  labor  at  all  except  to 
avoid  punishment,  and  they  will  never  do  more  than  just  enough 
to  save  themselves  from  being  punished,  and  no  amount  of  pun- 
ishment will  prevent  their  working  carelessly  and  indifferently." 
Why  should  it  ?  "  Fear,"  says  Bentham,  "  leads  the  laborer  to 
hide  his  powers,  rather  than  to  show  them ;  to  remain  below, 
rather  than  to  surpass  himself.  ...  By  displaying  superior  ca- 
pacity, the  slave  would  only  raise  the  measure  of  his  ordinary 
duties  J  by  a  work  of  supererogation  he  would  only  prepare 
punishment  for  himself.  His  ambition  is  the  reverse  of  that 
of  the  freeman  ;  he  seeks  to  descend  in  the  scale  of  industry, 
rather  than  to  ascend."  And  just  the  same  must  be  the  effects 
of  a  system  ir  which  the  workman's  wages  are  fixed  by  hia 
necessities  and  not  by  his  work. 

Sec  Prof.  Cairncs's  The  Slave  Power  (1862) ;  Chapter  II.    "The  Eoo- 
nomic  Uasis  of  Slavciy." 


122  ELEMENTS   OF   POLITICAL   ECONOMY. 

§  122.  The  history  of  European  serfdom  in  the  middle  ages 
tells  the  same  story.  The  great  mass  of  the  population  of 
Europe  was  in  a  state  of  villeinage,  which  varied  in  its  forms, 
but  was  commonly  little  short  of  slavery.  They  were  worth  so 
little  as  workmen  that  it  took  all  but  a  small  percentage  of  the 
population  to  raise  food  for  the  whole,  and  vast  numbers  were 
employed  in  herding  swine  and  cattle.  In  the  worst  cases,  which 
were  very  numerous,  the  villein  had  no  right  to  the  produce  of 
his  labor  ;  the  landlord  took  the  whole,  and  gave  the  serf  what 
he  pleased, — generally  the  refuse.  Hence,  as  Gurth  the  swine- 
herd (in  Ivanhoe)  says,  the  cattle  bore  Saxon  names  (ox,  pig, 
calf,  sheep),  while  they  lived  and  needed  care,  but  Norman 
names  (beef,  pork,  veal,  mutton),  when  killed  and  turned  to 
food. 

Afterwards  these  villeins  began  in  great  numbers  to  buy  their 
time,  and  then  their  freedom, — a  fact  which  shows  at  once  the 
greater  worth  of  free  labor.  Those  feudal  masters  were  too 
poor  to  give  anything  for  nothing;  they  sold  their  slaves  to  the 
slaves  themselves,  because  the  latter  could  afford  to  pay  more 
than  any  other  purchasers;  and  because  the  purchase-money 
earned  in  half  freedom  was  the  full  price  of  the  slave's  work. 
What  we  see  in  our  own  century  in  Prussia  went  on  in  England  : 
the  emancipated  serfs  bought  land  of  their  lords,  creating  a  new 
market  for  it.  The  Prussian  masters  complained  of  the  Stein 
legislation  (§  90)  as  an  invasion  of  vested  rights,  but  that  great 
statesman  told  them  that  a  generous  policy  would  benefit  all 
parties.  They  now  admit  the  fact;  what  their  serfs  gained  they 
did  not  lose.  Between  1829  and  1843  land  rose  75  per  cent,  in 
Westphalia,  while  there  has  been  an  incalculable  improvement 
in  the  condition  of  the  peasantry — some  of  whom  still  remember 
the  time  when  they  were  called  sclaven. 

§  123.  We  begin  to  hear  of  free  laborers  in  England  in  the 
fourteenth  century,  and  from  this  time  laws  are  passed  on  the 
one  hand  to  protect  them  and  increase  their  number,  on  the 
other  to  keep  their  wages  down  to  a  minimum  rate. .  These 
laws  tell  us  themselves  that  such  short-sighted  policy  could  not 


TUB   HISTORY   OF    LABOR.  123 

reach  its  end.  **  The  price  of  labor  continually  toaq  j  the  price 
of  food  constantly  fell"  (Thorold  Rogers).  This  must  have 
been  the  consequence  of  a  great  increase  in  productive  power  of 
labor  acting  in  harmony  with  capital.  The  logic  of  facts  drove 
wages  up,  and  every  successive  change  was  to  the  advantage  of 
all  classes.  The  workman  rose  in  freedom,  self-respect  and  efl&' 
ciency. 

Between  the  Restoration  and  the  Revolution  the  week's  wages 
of  a  farm  hand  was  four  shillings.  In  1680  an  M.  P.  com- 
plained that  the  English  mechanic  was  demanding  a  shilling  a 
day,  though  he  would  still  work  for  less.  In  the  century  end- 
ing 1830,  the  wages  of  a  carpenter  at  Greenwich  Hospital  rose 
from  2s.  6d.  to  5s.  8^.  a  day.  Bread,  indeed,  had  risen  equally, 
but  all  other  necessaries  had  fallen.  The  weekly  wages  of  a  farm 
hand  for  various  periods,  if  translated  into  wheat  values  at 
current  rates,  gives  this  result:  1680-1700,54  pints;  1701- 
1726,  64  pints;  1727-51,  78  pints;  1752-64,  80  pints;  1770, 
79  pints  ;  1780,  82  pints  ;  1824,  89  pints ;  1832,  90  pints. 

§  124.  In  France  this  matter  has  been  very  carefully  investi- 
gated, and  it  appears  that  the  rural  population  of  France  had 
half  as  much  food  as  they  needed  in  the  time  of  Louis  XIV. ; 
two-thirds  under  Louis  XV. ;  three-fourths  under  Louis  XVI. ; 
while  from  the  time  of  the  Empire  the  laborer's  budget  begins 
to  show  a  surplus  instead  of  a  deficit.  D'Argenson  writes  in 
1739  :  '*  At  the  moment  when  I  write,  in  the  month  of  Febru- 
ary, in  the  midst  of  peace, — with  appearances  promising  a 
harvest,  if  not  abundant,  at  least  passable, — men  die  around  us 
like  flies  and  are  reduced  by  poverty  to  eat  grass."  A  fern  loaf 
was  brought  to  the  council  table  by  the  King's  brother  that  his 
majesty  might  "  see  what  his  subjects  lived  upon."  With  the 
increase  of  wages,  labor  has  risen  to  such  efficiency  that  one 
fourth  of  the  soil  formerly  devoted  to  grain  is  now  #t  free  for' 
''  industrial  crops,"  and  the  food  of  a  much  larger  population  is 
raised  upon  the  other  three-fourths.  At  the  same  time  a  much 
larger  proportion  of  the  people  is  set  free  to  engage  in  manu« 
factures  of  all  kinds. 


124        ELEMENTS  OF  POLITICAL  ECONOMY, 

§  125.  In  the  colony  of  New  York  in  1773,  when  cheap  and 
fertile  lands  were  plenty,  and  every  mechanic  could  turn  farmer 
if  he  pleased,  day  laborers  were  paid  45  cents  a  day ;  ship 
carpenters,  three  times  as  much;  house  carpenters,  $1.10; 
journeymen  tailors,  56  cents.  Adam  Smith,  who  gives  us 
these  data,  says  that  the  London  rate  was  lower  than  this,  but 
that  of  the  other  colonies  was  not.  Has  the  rate  diminislied 
since  the  country  became  more  densely  settled  ?  In  1850  our 
factories  employed  731,137  men  and  225,922  women,  whose 
daily  wages  was  respectively  $.88  6-10  and  $.49  2-10,  for  each 
person.  In  1860  they  employed  1,040,349  men  and  270,900 
women,  at  wages  of  $1.02  and  $.59  respectively.  In  1870  the 
number  was  1,615,598  men  and  323,770  women,  and  114,628 
young  persons,  a  total  of  2,053,996  workers,  at  an  average  of 
$1.18  per  diem;  a  gain  of  37  per  cent,  in  ten  years. 

§  126.  What  is  true  of  different  periods  in  the  same  country 
is  equally  true  of  different  countries  at  the  same  date : — 111 
paid  labor  is  dearer  as  a  rule  than  well  paid.  Two  Englishmen 
will  mow  as  much  hay  as  six  Russians,  and  although  their  wages 
are  much  higher,  the  hay  costs  the  farmer  only  half  as  much. 
Arthur  Young  saw  that  the  Essex  laborer  was  cheaper  at  half 
a  crown  a  day  than  the  Tipperary  laborer  at  5  pence.  This  is 
still  true  of  Irish  labor  outside  Ulster  and  the  Dublin  Pale  ;  capi- 
talists pay  less  for  it  and  yet  find  it  at  least  no  cheaper.  The  Edin- 
burgh Review  denies  that  labor  is  cheaper  on  the  Continent  than 
in  England  in  spite  of  the  difference  in  wages,  and  Mr.  J.  S.  Mill 
says  "  the  cost  of  labor  is  frequently  at  its  highest  when  wages 
are  lowest."  He  says  that  labor  is  probably  no  dearer  in  the 
United  States  than  in  England.  When  the  Revolution  of  1848 
banished  the  English  navvies  who  were  working  on  the  French 
railroads,  it  was  found  that  twice  as  many  Frenchmen  could  not 
do  the  wo|i||.  But  when  these  had  been  put  for  a  while  on  the 
beef  diet  of  the  English  navvies,  they  came  up  to  the  English 
standard,  and  two  could  do  almost  as  much  as  five  had  done. 

§  127.  It  is  not  only  through  the  growth  of  the  laborer  in 
thrift  and  skill  tluit  his  condition  is  bettered.     All  the  ac<  umula- 


THE   LAW   OP    DISTRIBUTION.  125 

tioDS  of  capitiil  in  other  men's  hands  cooperate  to  make  his 
work  more  efficient  and  to  secure  him  a  lar<2;er  share  of  its  re- 
wards. All  the  work  that  has  been  done  already  adds  to  the 
value  of  the  work  that  he  is  now  doing.  Hence,  in  the  course 
of  natural  development,  the  power  of  labor  over  the  accumula- 
tions of  the  results  of  past  labor,  <^rows  with  the  growth  of  those 
accumulations.  Past  work  never  brings  market  price,  because 
its*  very  existence  makes  present  work  more  effective  than  it 
was.  "The  share  assigned  to  the  laborer  almost  always  bears  a 
much  larger  proportion  to  his  labor  than  his  employer's  share 
bears  to  the  labor  which  his  capital  represents  "  (W.  T.  Thorn- 
ton). 

The  price  of  a  thing  being  fixed  "by  the  cost  of  its  repro- 
duction, every  improvement  in  the  methods  of  production  lowers 
the  price  of  what  has  been  already  produced.  Suppose  that  any 
European  kingdom  or  American  state  were  brought  into  the 
market  as  a  whole,  it  would  sell  for  the  sum  needed  to  bring  it 
up  to  its  present  state  of  improvement  in  the  present  condition  of 
labor.  Such  a  sum  would  represent  a  mere  fraction  of  the  labor 
that  actually  was  required  in  its  past  history  to  do  the  same 
work.  Thus  the  worth  of  the  fee  simple  of  the  real  estate  of 
England  (including  roads  and  mines)  is  reckoned — or  was  a  few 
years  ago — at  £2,000,000,000.  This  represents  much  less  than 
the  labor  of  five  million  men  for  ten  years  at  present  English 
rat^s ;  yet  it  would  purchase  the  results  of  the  labor  of  millions 
spread  over  the  thousand  years  through  which  the  English 
nation  has  lasted  (§  102),  because  it  would  now  achieve  as  much 
as  those  millions  did.  Value  is  not  determined,  therefore,  by 
the  cost  of  production,  but  by  the  cost  of  reproduction,  and 
with  every  improvement  in  method,  and  even  with  every  ac- 
cumulation of  results,  the  latter  falls  below  the  former. 

With  the  growth  in  the  productive  power  of  labor,  an  in- 
creased proportion  of  the  increased  product  falls  to  the  laborer. 
The  improved  instruments  with  which  he  works  are  themselves 
the  products  of  more  efficient  labor ;  their  value  has  fallen  while 
ttis  has  risen.     The  capitalist  cannot  demand  as  much  for  tho 


126  ELEMENTS    OF   POLITICAL   ECONOMY. 

use  of  them  as  before;  the  workman's  ability  to  become  himselt 
a  capitalist  has  increased,  and  that  ability  is  one  of  the  points 
to  be  considered  in  their  contract.  The  capitalist's  share  in- 
creases greatly  in  quantity,  but  is  a  less  proportion  of  the  whob 
amount.  For  with  the  diminution  of  nature's  resistance,  the 
whole  dead  stock  employed  in  production  declines  in  value  while 
man's  value  rises,  as  he  is  by  all  these  changes  the  master  of 
larger  utilities.  The  power  of  his  labor  to  command  the  service 
of  capital  rises ;  that  of  capital  to  command  his  labor  declines  ', 
the  inequality  of  laborer  and  capitalist  tends  to  disappear. 

The  Italian  economist  Ferrara  in  the  introduction  to  the  twelfth  volume 
of  the  Bihlioteca  degV  Economisti  (Turin,  1852),  says  of  this  definition: 
"  Carey  [in  1837],  and  after  him  Bastiat  [in  1850],  have  introduced  a 
formula  a  posteriori,  that  I  believe  destined  to  be  universally  adopted  j 
and  it  is  greatly  to  be  regretted  that  the  latter  should  have  limited  him- 
self to  occasional  indications  of  it,  instead  of  giving  to  it  the  import- 
ance so  justly  given  by  the  former.  In  estimating  the  equilibrium  between 
cost  to  one's  self  and  the  utility  to  others,  a  thousand  circumstances  may 
intervene ;  and  it  is  desirable  to  know  if  there  be  not  among  men  a  law,  a 
principle  of  universal  application.  Supply  and  demand,  rarity  and 
abundance,  etc.,  are  all  insufficient  and  liable  to  perpetual  exceptions. 
Carey  has  remarked,  and  with  great  sagacity,  that  this  law  is  the  laboi 
saved,  the  cost  of  reproduction — an  idea  that  is,  as  I  think,  most  felicitous. 
It  appears  to  me  that  there  cannot  arise  a  case  in  which  a  man  shall 
determine  to  make  an  exchange,  in  which  this  law  will  not  be  found  to 
apply.  I  will  not  give  a  quantity  of  labor  or  pains,  unless  offered  in  ex- 
change for  a  utility  equivalent,  and  I  will  not  regard  it  as  an  equivalent, 
unless  I  see  that  it  will  come  to  me  at  less  cost  than  would  be  necessary 
for  its  reproduction.  I  regard  this  formula  as  most  felicitous,  because, 
while  on  the  one  hand,  it  retains  the  idea  of  cost,  which  is  constantly 
referred  to  by  the  mind,  on  the  other  it  avoids  the  absurdity  to  which  we 
are  led  by  the  theory,  which  pretends  to  see  everywhere  a  value  equivalent 
to  the  cost  of  production ;  and  finally  it  shows  more  perfectly  the  essential 
justice  that  governs  all  our  exchanges." 

§  128.  In  regard  to  the  quality  and  the  rewards  of  labor, 
therefore,  the  same  law  of  progress  holds  as  in  regard  to  food 
and  land.  As  society  advances  in  numbers  and  wealth,  there  is, 
unless  bad  economy  prevent,  a  constant  progress  from  worse  to 
better.  With  the  growth  of  wealth  and  of  numbers,  the  power 
of  combination  increases,  with  great  increase  in  the  productive- 
ness of  labor  and  the  power  of  accumulation. 


GREAT   AND   PETTY   INDUSTRY.  127 

What  are  the  chief  forms  of  bad  economy  that  prcvont  the 
laborer  from  profiting  fully  by  the  growth  of  society  ? 

(1)  When  the  steps  in  the  progress  of  improvement  are  very 
sudden  and  great,  a  considerable  amount  of  suffering  is  often 
inflicted;  but  this  is  temporary  and,  to  much  greater  extent 
than  is  commonly  supposed,  can  be  avoided.  The  introduction 
of  labor-saving  machinery  is  an  instance  of  what  wo  mean  ;  a 
much  more  striking  one  was  the  transition  during  the  last 
quarter  of  the  eighteenth  century  from  hand  to  steam  power, 
and  from  the  workshop  to  the  factory  system. 

The  old  school-books  used  to  tell  us  that  "  it  takes  ten  men  to 
make  a  pin."  But  since  that  day  an  inventive  mechanic  has 
put  together  a  machine  that  only  needs  to  be  fed  with  wire, 
well  oiled  and  supplied  with  steam-power,  to  turn  out  complete 
pins,  sort  them,  and  even  thrust  them  into  the  papers  in  the 
right  numbers  and  in  straight  rows.  What  is  to  become  of  the 
ten  pin-makers  ?  In  any  community  in  which  industrial  progress 
is  constant,  there  will  be  openings  for  their  work.  Even  Mr. 
Mill,  who  believes  that  such  inventions  have  not  '' lightened  the 
toil  of  any  human  being,"  admits  that  "they  have  enabled  a  greater 
number  to  live  the  same  life  of  drudgery  and  imprisonment." 
Why  is  this  the  result  ?  Because  pins  made  by  the  new  process 
are  so  much  cheaper  than  before,  that  the  demand  for  them  is 
greatly  enhanced,  and  when  this  demand  has  reached  its  natural 
height  the  whole  number  of  persons  employed  in  the  manu- 
facture (including  miners,  machine-makers,  engineers,  &c.)  is 
greater  than  it  was  before.  As  the  money  then  needed  to  buy  pins 
for  a  family  is  mucb  less  than  it  was,  there  is  something  left 
to  buy  other  things,  and  to  pay  the  men  who  produce  them. 

Furthermore,  machinery  supersedes  muscle  but  not  brains, 
force  but  not  intelligence.  It  drives  men  from  low-priced, 
mechanical  work,  to  employments  that  demand  a  higher  capacity 
and  command  higher  pay.  Increasing  the  productiveness  of 
labor,  it  increases  also  the  workman's  share  of  its  results.  And 
this  share  is  not  to  be  conceived  as  lying  idle  in  the  hands  of  those 
that  earn  it.  It  is  again  expended  in  employing  other  workmen 
by  purchasing  necessaries  and  comforts. 


128  ELEMENTS    OF    POLITICAL    ECONOMY. 

The  change  in  methods  of  work  (by  its  demand  for  adaptive- 
ness),  and  the  quality  of  the  new  kind  of  work,  both  demand  a 
large  measure  of  intelligence  in  the  workman.  The  amount  of 
suffering  and  privation  involved  in  such  a  change,  is  exactly 
proportional  to  the  ignorance  and  general  backwardness  of  the 
working  classes.     For  this  society  is  directly  responsible. 

§  129.  The  transition  from  industry  organized  on  a  small  scale 
to  the  larger  industry  of  the  factory  system  was  begun  in  Lan- 
cashire in  1790  by  Ilichard  Arkwright,  and  has  been  one  of  the 
greatest  of  industrial  revolutions.  It  grew  naturally  out  of  the 
invention  of  the  steam-engine,  and  the  application  of  a  power  that 
moves  a  hundred  looms  or  spinning  jennies  as  easily  as  a  score. 
It  has  introduced  the  precision  and  effectiveness  of  military  dis- 
cipline into  industry,  divided  labor  more  thoroughly,  assigned  to 
every  workman  his  position,  and  reduced  the  loss  of  time  and 
of  material  to  a  minimum.  It  thus  rendered  the  labor  of  the 
workman  far  more  productive  than  when  he  wrought  in  isolation, 
flinging  the  shuttle  and  tramping  down  the  treadles  by  the  force 
of  his  own  muscles.  It  consequently  increased  the  wages  of 
his  industry,  while  it  diminished  the  value  of  all  manufactured 
goods.  The  transition  to  the  industry  of  the  factory  did  not 
begin  in  the  United  States  till  the  second  decade  of  the  present 
century,  but  since  that  date  the  wages  of  workmen  have  been 
doubled,  and  that  of  workwomen  trebled,  while  the  purchasing 
power  of  both  has  advanced  at  a  still  swifter  rate. 

It  may  be  questioned,  however,  whether  the  change  was  not 
niore  sweeping  than  it  need  have  been  if  the  working  classes 
bad  been  fully  alive  to  their  own  interests, — and  therefore  more 
injurious,  temporarily,  to  their  interests.  Large  intelligence 
and  large  capital  went  together  in  effecting  the  change.  It 
was  assumed  on  all  hands  that  the  steam-engine  can  only  be 
employed  with  economy  as  the  motive  power  of  a  large  estab- 
lishment, which  experience  shows  to  be  untrue.  Small  em- 
ployers shared  in  the  prejudice  of  their  workmen  and  the 
uneducated  generally  against  the  new  invention.  Instead  of 
accommodating  themselves  to  the  logic  of  facts,  they  resisted 


VARIED    INDUSTRY    RAISES    WAGLS.  120 

tlic  change,  and  were  swept  into  the  largo  factories  by  the  forco 
of  circumstances,  before  they  knew.  The  restoration  of  petty 
industry  in  a  new  form,  with  all  the  advantages  of  discipline, 
intelligence  and  machinery,  is  one  of  the  most  desirable  of 
changes  in  the  future. 

§  130.  (2)  A  French  workman  has  well  said  that  "  when 
two  workmen  run  after  one  master,  wages  fall;  they  rise  when 
two  masters  run  after  one  workman."  Had  he  said  "  two  sorts 
of  masters,"  it  would  have  been  even  truer.  "  There  is  rarely 
competition  for  labor  tcithin  a  trade  in  a  particular  place,  unless 
there  be  competition  for  it  from  without"  (Leslie).  The  more 
openings  there  are  for  the  laborer  to  invest  his  capital  (which  is 
his  labor),  and  for  the  capitalist  to  invest  his  (which  is  the  accu- 
mulation of  past  labor),  the  better  each  will  be  remunerated. 
Hence  the  connection  between  varied  industry  and  fair  wages,  as 
well  as  fair  profits.  In  any  country  (or  even  district)  in  which 
that  is  wanting,  labor  will  be  but  poorly  paid,  and  especially  so,  if 
agriculture  is  the  only  pursuit  open  to  the  great  body  of  the 
people.  Furthermore,  that  form  of  industry,  as  a  rule,  furnishes 
employments  that  are  suited  only  to  able-bodied  men,  and  con- 
sequently, if  there  be  not  a  fair  admixture  of  manufactures, 
those  who  are  not  equal  to  hard,  out-door  work,  are  left 
dependent  upon  those  who  are.  With  the  rise  of  a  varied  in- 
dustry, the  number  of  workers  rises  to  a  maximum,  that  of  idlers 
sinks  to  a  minimum.  A  field  sown  with  various  sorts  of  grass 
seed  yields  a  larger  crop  than  if  one  kind  only  be  used,  because 
each  finds  special  nourishment  in  some  single  element  of  the  soil; 
and  so  is  it  with  the  employment  of  all  the  elements  of  in- 
dustrial power. 

In  later  English  history,  the  manufactures  have  become  con- 
centrated in  London  and  in  the  midland  and  northern  shires. 
Between  1770  and  1850,  wages  rose  Q6  per  cent,  in  the  twelve 
northern  shires  and  100  per  cent,  in  Lancashire  and  the  West 
Riding  of  Yorkshire  :  in  eighteen  southern  agricultural  shires, 
only  14  per  cent.,  although  food  and  cottage-hire  were  far 
dearer.      Fn  the  former  two  sorts  ofmgt^eiWSttBS^;^  one  work- 

>^  OP  THB*^^ 

^uhiversitt: 


130  ELEMENTS   OF   POLITICAL    ECONOMY. 

man  ;  in  the  latter  the  growth  of  population  has  no  outlet  save 
in  farming;  local  capital,  of  which  labor  is  the  most  perishable 
form,  has  no  other  investment,  and  two  workmen  run  after  one 
master.  In  Ireland  the  principle  is  seen  still  more  clearly.  The 
south  is  now  not  over  populated,  but  under  populated;  whole 
districts  are  desolate  and  idle ;  yet  nowhere  are  wages  above 
eight  shillings  a  week,  though  food  is  nearly  as  dear  as  in 
England,  to  which  everything  is  now  carried.  In  the  north, 
the  eastern  three  counties  have  a  very  different  rate  of  wages. 
*'  In  that  vast  system  of  manufactures,  which  now  stretches  over 
several  counties,  it  is  around  towns  in  which  population  has 
doubled  in  half  a  generation,  that  agricultural  wages  are  high- 
est''  (Leslie).  The  north,  from  the  first  days  of  the  Ulster 
plantation,  has  had  two  sorts  of  employers  running  after  every 
workman. 

§  131.  (3)  Laws  made  in  the  interest  of  the  upper  classes 
very  greatly  interfere  with  the  well-being  of  the  working  classes, 
especially  the  farm-hands.  Till  very  recently  the  right  of  the 
workiogmen  peaceably  to  combine  to  secure  higher  wages  was 
denied  and  its  exercise  punished  on  both  sides  of  the  Atlantic 
although  no  law  forbade  the  employers  to  combine  in  depressing 
wages.  Till  very  recently  the  treasurer  of  a  Trade's  Union  in 
England  might  rob  it  with  impunity;  the  law  would  not  punish 
him.  The  Unions  were  outlawed,  though  their  members  since 
1824  were  not. 

Laws  not  made  for  any  such  purpose  have  often  been  perverted 
in  their  application  to  the  great  injury  of  the  working  classes. 
Thus  under  the  old  English  poor  law,  the  farmers  in  many  dis- 
tricts by  combined  action  beat  down  their  workmen's  wages  to 
such  a  point,  that  the  latter  were  forced  to  "  come  upon  the 
parish,"  by  asking  relief  as  out-door  paupers.  The  guardians 
were  required  by  the  law  to  find  them  work,  which  they  did  by 
supplementing  their  wages  up  to  the  point  required  for  their 
subsistence.  Thus  able-bodied  men,  who  fairly  earned  a  living, 
were  degraded  to  the  rank  of  paupers  in  order  that  the  whole 
community  might  be  forced  to  contribute  to  the  farmer's  profits. 


LAWS   AGAINST   LABOR.  131 

"  He  was  virtually  able  to  put  his  hand  into  the  pnckots  of  tho 
neighboring  rate-payers  to  make  up  the  deficiency  to  those  whom 
he  employed"  (Fawcett).  The  consequences  were  most  disas- 
trous; the  spirit  of  the  people  was  broken,  and  pauperism 
increased  so  vastly  that  it  absorbed  in  some  parishes  more  than 
half  the  rent  of  the  land.  In  some  cases  the  land  was  actually 
oflfered  to  the  paupers  to  till  for  themselves  and  refused ;  they 
preferred  to  live  on  alms.  Could  there  be  a  worse  economy  of 
the  wealth-producing  forces  of  a  nation  than  the  destruction  of 
the  thrift,  the  self-respect  and  the  hopefulness  of  the  common 
people  ? 

§  132.  The  method  of  prison  discipline  commonly  adopted  in 
this  country  tends  to  do  injustice  to  the  working  classes.  In  order 
to  make  the  prison  self-supporting,  the  labor  of  the  prisoners  is 
hired  out  to  a  contractor,  or  some  industry  is  practised  by  the 
prisoners,  and  its  products  sold  for  the  benefit  of  the  State.  In 
either  case  the  tendency  of  the  system  is  to  force  down  the  wages 
of  the  free  workman.  The  State  cannot  bring  its  bondsmen 
into  the  labor-market  either  directly  or  indirectly  in  such  a  way 
as  to  secure  the  full  market  price  of  their  work.  No  man  will 
hire  convict-labor  except  on  terms  specially  favorable  to  himself. 
No  State  can  dispose  of  the  articles  made  by  convict-labor  except 
at  lower  rates  than  are  usual  for  such  goods.  There  is  no  objec- 
tion to  making  convicts  work;  on  the  contrary,  every  one  recog- 
nizes the  usefulness  of  work  as  a  moral  discipline.  But  the  work 
should  be  in  the  production  of  articles  needed  for  the  prison's 
use.  In  this  way  the  prison  should  be  directly  self-supporting 
by  supplying  all  its  own  wants  of  food,  clothing,  furniture  and 
the  like. 

§  133.  (4)  The  disproportionate  outlay  of  the  workingman's 
Baviny;s  upon  objects  of  luxury,  instead  of  a  wise  saving,  is 
justly  alleged  as  a  cause  of  misery  to  the  class.  Thus  the  ex- 
penditure upon  spirituous  liquors  is  a  heavier  tax  upon  the 
earnings  of  the  laborer  than  all  others  put  together.  But  the 
remedy  and  therefore  the  responsibility  of  this  state  of  things 
is  partly  with  society  at  large.     It  is  in  the  improvement  of  the 


132  ELEMENTS    OF    POLITICAL    ECONOMY. 

homes  of  the  poor,  and  in  furnishing  them  with  mental  resoirces 
and  proper  places  of  resort.  So  long  as  the  gin-shop  and  the  bar- 
room are  to  the  modern  workman  what  the  church  was  to  the 
peasant  of  the  Middle  Ages,  viz. :  the  only  clean,  warm  and 
well-lighted  room  that  he  is  welcome  to  visit  in  his  hours  of 
leisure, — so  long  will  he  go  to  them.  "  The  main  exciting 
cause  of  drunkenness  is,  I  believe,  bad  air  and  bad  lodging" 
(Chas.  Kingsley).  Alcohol  is  sought  as  the  only  accessible 
relief  from  the  physical  prostration  and  mental  depression  that 
bad  habits  of  living  produce.  Drunkenness  was  once  universal 
in  the  highest  classes  of  society;  ''drunk  as  a  lord"  was  an 
English  proverb.  It  has  decreased,  no  doubt  with  the  growth 
of  habits  of  personal  cleanliness,  and  with  a  larger  intelligence 
as  to  the  conditions  on  which  good  health  may  be  enjoyed. 

In  some  parts  of  Sweden  they  have  effected  a  thorough  reform  of  the 
tavern,  without  attempting  to  abolish  it.  The  right  to  sell  liquor  in  a 
district  is  put  up  at  auction  by  the  government,  and  bought  in  by  an 
association  of  the  friends  of  temperance.  They  open  the  number  of 
houses  that  the  law  prescribes  and  at  the  legal  hours  only.  They  sell 
other  drinks  and  food  as  well  as  pure  liquors,  and  allow  of  no  solicita- 
tion to  purchase  the  latter.  No  person  who  has  had  "enough"  can  get 
any  more.  The  association  furnish  pleasant  rooms  to  which  the  work- 
ingraan  can  invite  his  family,  and  provide  books  and  periodicals.  Tho 
proceeds,  after  paying  all  expenses,  go  to  local  charities. 

The  diffusion  of  education  will  both  directly  and  indirectly 
work  to  the  same  end.  When  this  has  multiplied  the  number 
and  elevated  the  character  of  his  enjoyments,  the  workman  will 
no  longer  seek  happiness  in  sordid  physical  gratifications.  Per- 
haps he  will  then  come  to  learn — as  no  class  has  yet  learned 
—the  vast  importance  of  the  way  in  which  a  people  dis- 
poses of  the  small  surplus  left  it,  after  the  necessaries  of  life 
have  been  provided.  Everything  that  impoverishes  mind  and 
heart  tends  to  increase  the  outlay  upon  articles  of  false  luxury 
which  are  rather  hurtful  than  helpful. 

§  134.  (5)  Grrave  injuries  have  been  inflicted  on  the  laboring 
classes  by  the  conflict  between  labor  and  capital.  In  the  absence 
of  uny  knowledge  of  the  essential  harmony  of  their  interests. 


trades'  unions  and  their  strikes.  133 

or  at  best  from  the  notion  that  the  interests  of  the  \Torkincn 
were  consulted  by  keeping  down  wages  to  the  natural  level, 
English  employers,  with  the  approval  and  support  of  English 
economists,  have  striven  to  get  their  work  done  at  a  minimum 
rate  of  wages.  The  workmen,  finding  individual  resistance  use- 
less, organized  for  combined  eflFort,  and  fixed  rates  of  wages  for 
their  respective  trades.  Their  right  to  associate  and  to  refuse 
to  work  for  less  than  this  seems  plain  enough,  but  the  governing 
classes  denied  the  right,  and  treated  these  Unions  as  unlawful 
conspiracies.  Being  thus  put  out  of  the  pale  of  the  law,  the 
Unions  unhappily,  but  not  unnaturally,  fell  into  lawless  methods 
of  securing  their  ends.  They  had  the  right  to  use  all  persuasive 
methods  to  induce  those  who  did  not  belong  to  the  Union  and 
comply  with  its  rules,  to  become  members,  and  failing  in  that 
to  refuse  to  work  in  the  same  shop  with  them.  But  they  went 
beyond  all  lawful  limits  to  force  outsiders  into  membership,  and 
to  force  them  from  work  during  "  strikes,^'  as  they  called  the 
temporary  suspension  of  work  intended  to  force  masters  to  raise 
wages.  "  Rats,"  as  these  outsiders  were  called,  had  their  tools 
destroyed,  their  persons  assaulted,  their  houses  attacked,  some- 
times by  explosive  substances ;  and  in  a  number  of  cases  their 
lives  were  taken. 

It  is  a  question  whether  the  Trades'  Unions  have  accomplished 
the  ends  of  their  organization.  The  figures  presented  by  Mr. 
Thornton  in  his  work  on  Labor  seem  to  show  conclusively  that 
they  have ;  that  the  hours  of  labor  have  been  reduced,  and  that 
rates  of  wages  that  would  never  have  been  attained  without  com- 
bined action,  have  been  thus  secured,  and  that  the  end  of  the 
process  is  not  reached.  This  indeed  is  contrary  to  the  teachings 
of  English  economists  that  there  is  a  limited  wage  fund  subject 
to  the  demands  of  labor,  and  that  the  average  share  of  each 
workman  can  only  be  increased  by  reducing  the  number  of 
claimants  or  increasing  the  fund.  '<  Workmen  are  solemnly  ad- 
jured, in  the  name  of  political  economy,  not  to  try  to  get  their 
wages  raised,  because  success  in  the  attempt  must  be  followed 
by  a  fall  of  profits,  and  bring  wages  down  again.     They  are  en- 


134  ELEMENTS    OF   POLITICAL   ECONOMY. 

treated  not  to  better  themselves,  because  any  temporary  better- 
ing must  be  followed  by  a  reaction  that  will  leave  them  as  ill  oflf 
as  before."  "  To  go  on  reasserting  that  unionism  does  not  raise 
wages,  and  that  to  all  appearances  permanently,  would  now-a- 
days  be  running  too  completely  counter  to  every-day  experience. 
To  assert  that  it  cannot  raise  them,  is  the  utmost  extent  to  which 
any  but  the  hardiest  theorists  still  venture  to  go''  (Thornton). 
True  it  is  that  strikes  have  frequently,  perhaps  in  a  majority 
of  cases,  ended  with  a  victory  for  the  masters;  but  the  very 
rise  in  rate  thus  successfully  refused  has  been  almost  always 
conceded  afterwards  to  prevent  a  renewal  of  the  strike;  and 
the  gain  thus  made,  when  the  aggregate  of  increase  is  com- 
puted, has  been  such  as  to  cast  into  the  shade  all  the  sacrificea 
and  losses  incurred  during  the  strike. 

§  135.  Trades'  Unions'  strikes  need  not  succeed  if  the  masters 
would  unite  as  closely  and  cooperate  as  heartily  as  the  men. 
As  a  rule  the  employers  are  taken  in  detail.  The  strike  for  an 
advance  is  made  in  a  few  establishments,  and  those  that  it  throws 
out  of  work  are  supported  by  the  members  of  the  Union  at  work 
elsewhere.  Succeeding  in  these  establishments,  they  then  make 
the  same  demands  in  other  quarters,  and  with  the  same  result. 

Strikes  have  utterly  failed  in  a  few  cases,  where  the  masters 
throughout  a  whole  trade  have  at  once  discharged  all  members 
of  the  Union,  thus  retaliating  by  what  is  called  a  "  lock-out." 
But  ab  a  rule  the  employers  of  labor  have  not  the  means  of 
effecting  close  association,  that  their  workmen  possess.  Busi- 
ness makes  them  rivals ;  they  are  often  blindly  exulting  in  the 
embarrassment  of  a  brother  capitaHst,  when  they  might  well 
read  in  it  a  prophecy  of  what  is  coming  on  themselves.  Nor 
have  they  any  of  the  vigorous  class  feeling  and  opinion,  which 
enables  the  workingmen  to  compel  unwilling  associates  to  fall 
into  line. 

§  136.  These  Unions,  originating  in  England  about  half  a 
century  ago  (at  first  merely  as  Benefit  Societies,  which  most  of 
them  still  are),  have  spread  into  France  and  Glermany,  and  the 
United  States.     They  were  brought  across  the  ocean  by  English 


THE    RESTORATION    OF   HARMONY.  135 

and  Welsh  operatives,  attracted  to  our  shores  by  the  superior 
advantages  possessed  by  our  working  classes.  They  arc  still  an 
exotic  on  our  soil ;  their  strikes  are  generally  in  the  hands  of 
persons  of  foreign  birth  ;  they  have  never  attained  the  complete- 
ness of  organization  and  the  eflFective  management  that  character- 
ize those  of  England.  This  is  due  to  the  fact  that  there  is 
really  no  such  need  of  them  in  a  country  where  every  man  can 
leave  the  workshop  and  become  a  farmer  if  he  will;  where  the 
supply  of  skilled  workmen  generally  falls  far  below  the  demand; 
where  the  utmost  freedom  of  association  co-exists  with  the  habit 
of  spontaneous  action ;  where  wages  are  steadily  and  materially 
advancing;  where  public  sentiment  gives  no  support  to  the  doc- 
trine that  low  wages  are  best;  and  where  social  and  political 
prestige  is  rather  on  the  side  of  numbers,  than  on  that  of  wealth 
and  the  capitalists.  They  have  unquestionably  checked  the 
growth  of  some  of  our  industries  by  limiting  too  much  the 
number  of  persons  who  may  be  admitted  as  apprentices,  a  rule 
that  does  far  more  mischief  in  a  rapidly  expanding  country  than 
in  one  that  is  nearer  the  limit  of  its  industrial  capacities.  But 
after  all,  it  must  be  borne  in  mind  that  united  action  is  in  many 
cases  the  best  and  most  eflfective  means  for  labor  to  secure  fair 
terms  in  dealing  with  capital ;  and  that  there  is  in  the  Trades 
Union  itself,  apart  from  the  outrages  sometimes  perpetrated  in 
its  name,  nothing  to  call  for  reprobation. 

§  137.  Labor  and  capital  in  conflict  are  in  an  unnatural  state  ; 
harmony  is  their  true  relation.  For  reasons  already  given, 
capital  finds  its  account  in  the  cheerful  service  of  labor,  not  in 
its  discontent.  To  labor,  capital  is  a  benefactor  in  the  highest 
sense ;  were  the  whole  class  of  capitalists  with  all  their  accu- 
mulations to  be  annihilated,  labor  would  be  reduced  to  indigene© 
and  a  struggle  for  existence  more  severe  than  can  easily  be  con- 
ceived. The  capitalist  is  the  captain  of  industry,  who  takes 
the  unorganized  mob  of  men,  drills  it  into  a  disciplined  army, 
supplies  them  with  weapons,  ammunition  and  a  commissariat, 
and  leads  them  to  industrial  conquests.  He  is  able  to  do  so  be- 
cause he  has  accumulated  instead  of  merely  consuming;    his 


136  ELEMENTS    OF    POLITICAL   ECONOMY. 

right  to  his  million  rests  on  exactly  the  same  ground  as  the 
workman's  right  to  his  week's  earnings. 

By  what  method  to  restore  a  lasting  harmony  between  the 
two,  is  a  great  question  of  the  day.  The  first  and  simplest 
method  is  by  arhitration.  Where  it  is  possible  to  obtain  referees, 
in  whose  impartiality  and  intelligence  both  parties  have  confi- 
dence, and  where  both  are  ready  to  submit  their  case,  disputes 
are  easily  settled  and  harmony  restored.  The  ordinary  courts 
of  justice  are  not  available  for  the  purpose,  because  they  cannot 
adjudicate  the  terms  of  contracts  not  yet  made^  and  because  the 
judges  have  no  special  acquaintance  with  the  matters  at  issue. 
The  establishment  of  tribunals  of  arbitration  chosen  from  both 
masters  and  men,  with  the  sanction  of  government,  has  been 
successfully  tried  in  England,  and  these  have  put  an  end  to 
several  recent  strikes  and  lock-outs.  Something  like  these, 
though  more  official  in  their  character,  were  the  Gonseils  de 
Prudliommes  of  mediaeval  France,  which  were  revived  by  Na- 
poleon I.  in  1806  ]  but  the  latter  are  rather  government  courts 
of  selected  experts  to  decide  legal  issues. 

§  138.  A  second  solution  is  offered  by  the  system  of  cooperor 
tion,  whose  advocates  would  abolish  the  conflict  between  capitalist 
and  laborer,  by  uniting  the  two  functions  in  the  same  persons. 
They  would  have  workingmen  unite  their  savings  to  establish  a 
workshop  of  their  own,  to  be  managed  by  foremen  of  their  own 
selection  under  rules  adopted  by  the  whole  body. 

Instances  of  this  industrial  method  are  to  be  found  very  early 
in  our  own  country.  The  Greek  merchant  marine  is  based  on 
the  same  principle,  and  it  has  secured,  through  the  zeal  and 
energy  of  its  sailors,  nearly  the  monopoly  of  the  carrying  trade 
in  the  Mediterranean,  But  the  first  proclamation  of  the  method 
as  a  means  to  revolutionize  industry  and  commerce  was  made  by 
the  socialist  Robert  Owen.  His  design  was  to  set  up  co'opera- 
tive  stores  rather  than  workshops ;  to  abolish  the  profits  of 
middlemen  rather  than  to  get  rid  of  the  wages  system.  About 
1824-30  many  societies  were  formed  on  this  basis  to  make 
"  every  man  his  own  shopkeeper."     The  most  successful  was  the 


CO-OrEEATIVE   INDUSTRY.  137 

"  RDclidale  Equitable  Pioneers/'  organized  in  1844.  The  politic 
cal  troubles  of  1848-50  called  attention  to  this  method  and  to 
successful  applications  of  it  to  industry  in  France.  The  Christian 
socialist  party  (F.  D.  Maurice,  Chas.  Kingsley,  Thos.  Hughes, 
J.  M.  Ludlow,  &c.)  urged  its  general  adoption  as  a  remedy  for 
the  deadly  competition  of  the  wages  system.  Every  man  was  to 
be  his  own  employer  as  well  as  his  own  shopkeeper.  In  spite 
of  many  failures,  cooperation  has  an  honorable  record  of  suc- 
cesses to  show  in  France,  England,  Germany,  Spain  and  the 
United  States. 

If  considered  as  intended  to  supersede  the  wages  system  en- 
tirely, cooperation  is  open  to  serious  theoretical  and  practical 
objections.  In  the  light  of  the  true  law  of  social  progress 
(§  30),  it  will  be  seen  to  be  a  decline  in  industrial  organization, 
when  duties  and  functions  that  have  been  distributed  among 
several  persons  are  united  in  the  same  person.  It  would  be  a 
loss  on  all  sides,  were  the  captain  of  industry  to  cease  to  exist, 
and  were  his  functions  to  be  vested  in  the  whole  body  of  work- 
men. The  singleness  of  purpose,  the  clearness  of  outlook,  and 
the  energy  that  large  industrial  operations  demand,  could  never 
be  brought  into  play  by  an  association  of  workmen,  or  by  dele- 
gates chosen  from  their  ranks  and  subject  to  their  control.  As 
a  rule,  the  possession  of  capital  is  itself  the  gauge  of  business 
capacity,  and  of  the  power  to  organize  and  administer  an  estab- 
lishment. To  exclude  those  who  possess  these  from  their 
present  position,  would  be  to  deprive  industry  of  its  natural 
and  trusted  leaders.  Now  if  cooperation  were  to  become  uni- 
versal they  would  become  mere  money-lenders,  or  else  their 
capital  would  be  entirely  withdrawn  from  the  sphere  of  produc- 
tion,— a  loss  of  the  results  of  past  labor  that  would  be  eminently 
deporable. 

In  practice  it  has  been  found  diflficult  to  secure  the  right  sort 
of  men  to  take  the  place  at  the  head  of  cooperative  establishments. 
Men  of  the  necessary  qualifications  are  generally  able  to  com- 
mand their  own  price  elsewhere,  and  are  too  well  satisfied  with 
their  positions  to  give  them  up  to  begin  a  mere  experiment  here 


138  ELEMENTS    OP    POLITICAL   ECONOMY. 

And  if  they  did,  the  estimate  put  upon  their  services  by  their 
new  associates  is  commonly  much  below  their  deserts,  so  that 
they  would  soon  be  glad  to  go  back  to  their  old  places.  In 
the  absence  of  first-class  men,  it  is  commonly  not  the  second 
class  that  are  chosen,  but  rather  men  of  an  inferior  grade  but 
more  showy  qualities. 

§  139.  Less  open  to  objection  as  a  solution  of  the  question  is 
the  plan  of  industrial  partnerships.  In  this,  the  proprietor  of 
an  establishment  agrees  to  pay  his  workmen  the  current  rate  of 
wages,  and  also  to  distribute  among  them  at  the  end  of  the  year 
all  or  part  of  the  net  profit  above  a  certain  percentage,  say  15 
or  20  per  cent.  This  method  identifies  the  interests  of  labor 
and  capital  without  confounding  their  functions.  The  men  are 
stimulated  to  do  their  utmost, — to  avoid  all  waste  as  tending  to 
diminish  profits,  and  all  careless  work  as  injuring  their  market, 
— and  to  keep  each  other  up  to  the  mark  by  the  force  of  public 
opinion. 

This  plan  also  is  no  novelty  in  our  own  country.  Thus  in 
Albert  Gallatin's  Glass  Factory  (established  in  1794  at  New 
Geneva,  Pa.,  being  the  first  west  of  the  Alleghenies),  every 
workman  had  a  direct  interest  in  the  profits,  besides  regular 
wages.  The  whale  fishery  and  the  China  trade  were  managed 
on  the  same  principle.  It  was  first  urged  upon  the  attention  of 
Europe  by  Charles  Babbage  in  his  Economy  of  Manufactures 
(1829).  A  Parisian  house-painter,  after  making  trial  of  the 
wages  system  in  1842,  took  his  workmen  into  this  limited  sort 
of  partnership,  with  moral  and  financial  results  that  attracted  very 
great  attention,  and  led  to  its  imitation  by  a  considerable-number 
of  establishments  in  France  and  not  a  few  in  England.  It  has 
been  found  that  the  plan  restores  thorough  good  feeling  between 
masters  and  men,  where  the  worst  irritation  has  existed  for 
years  ;  that  it  makes  the  workmen  eager  to  adopt  improved 
methods,  which  they  would  previously  have  resisted  to  the  utmost; 
that  it  diminishes  the  amount  of  drunkenness  and  thriftlessness, 
and  reduces  to  a  minimum  the  number  of  holidays  spent  in 
dissipation ;  that  it  creates  a  vigorous  public  opinion  against  eye- 


INDUSTRIAL   PARTNERSHIPS. — CREDIT   BANKS.       139 

service  and  waste,  and  leads  men  to  pride  themselves  upon  giving 
good  work  for  their  wages.  In  some  cases  the  amount  of  profits 
reserved  to  themselves  by  the  firm,  was  fixed  at  a  higher  percen- 
tage than  they  had  ever  earned ;  and  yet  at  the  end  of  the  year 
they  had  a  surplus  to  divide  with  their  workmen. 

The  plan  has  been  adopted  in  a  good  number  of  American 
establishments,  but  it  may  fairly  be  hoped  that  it  will  be  ex- 
tended to  many  more,  as  it  seems  to  be  the  least  objectionable 
and  the  most  eflfective  of  all  the  new  solutions  of  the  labor  ques- 
tion. Of  course  circumstances  will  demand  manifold  modifica- 
tions of  the  principle.  The  number  of  laborers  employed  in 
proportion  to  the  capital  invested,  must  determine  what  is  the 
proportion  of  the  surplus  that  will  fall  to  capital  and  labor 
respectively.  In  case  the  business  has  suffered  losses,  it  might 
perhaps  be  both  wise  and  just  to  recoup  those  losses  out  of  the 
profits  of  following  years.  All  these  details  are  open  to 
equitable  adjustment  at  the  start,  or  to  arbitration  as  cases  of 
disagreement  arise ;  but  the  great  thing  is  to  get  the  workman 
to  feel  that  he  is  working  for  himself  and  has  something  to  hope 
for  as  the  result  of  his  skill  and  diligence. 

§  140.  Another  modification  of  the  principle  of  cooperation 
is  that  introduced  in  Germany  by  Schultze-Delitzch.  In  that 
country  industry  is  not  so  generally  organized  on  the  grand 
scale  as  is  common  in  England,  France  and  America;  a  great 
part  of  their  workshops  are  very  small  establishments,  often 
managed  by  a  single  family.  If  these  were  to  have  their 
materials  at  the  lowest  price  they  must  buy  them  at  wholesale  to 
save  commissions  j  to  this  end  there  were  organized  raw  material 
associations,  that  they  might  combine  their  capital  for  such  pur- 
chases. Then  came  the  establishment  of  public  bazaars  by  these 
or  similar  associations,  for  the  sale  of  their  wares.  But  it  was 
found  that  these  workmen  had  but  little  capital  and  no  credit; 
they  could  offer  no  sufficient  security  to  induce  the  banks  to 
lend  them  even  the  small  sums  that  they  needed  ;  for  a  working- 
man's  capital  is  his  health  and  strength,  and  his  death  or  serious 
illness  destroys  it.     But  if  the  single  workingman  has  no  credit, 


140  ELEMENTS    OF    POLITICAL    ECONOMT. 

a  large  body  of  them  organized  on  the  principle  of  mutual 
security  would  have  credit  enough  ;  if  one  or  a  few  died  or  were 
ill  the  rest  would  be  the  bank's  security.  Associations  were 
therefore  formed  to  establish  loan  banks  or  people's  banks,  as 
they  are  variously  called ;  and  these  banks  make  advances  to 
their  shareholders  on  such  terms  as  put  them  on  an  equality  with 
the  rich. 

The  movement  began  in  1850.  In  1872,  after  twenty-two  years  of  slow 
and  steady  growth,  there  were  442  associations  for  purchase  of  raw 
materials  and  sale  of  wares ;  2220  banks  to  make  advances  to  workmen. 
Of  these  banks,  807  reported  372,742  members;  loans,  359,519,200  thalers; 
capital,  21,373,529  thalers;  deposits  and  borrowed  capital,  77,188,731 
thalers.  (A  thaler  is  seventy-two  and  a  half  cents.)  This  group  of 
banks  is  connected  with  a  central  bank,  which  negotiates  loans  for  them 
in  the  money  market. 

§  141.  The  question  of  the  rate  at  which  woman's  labor 
should  be  paid,  and  of  the  employments  that  should  be  open  to 
her,  is  one  of  the  living  issues  of  our  time,  and  must  not  be 
passed  over. 

The  rate  at  which  she  is  paid  is  often  alleged  as  an  instance  of 
the  power  of  custom,  and  unjust  custom  besides.  For  doing 
exactly  the  same  sort  of  work,  it  is  said,  and  doing  it  quite  as 
well,  she  receives  far  less  pay  than  a  man  does.  Custom,  no 
doubt,  has  its  influence  here  ',  the  more  rapid  advance  of  woman's 
rate  of  pay  seems  to  indicate  as  much.  But  there  is  reason  as 
well  as  custom  for  the  difference. 

(1)  Men  are  more  steady  workmen  than  women  are.  The 
latter,  rightly  or  wrongly,  all  but  a  small  minority,  look  forward 
to  marriage  and  the  care  of  a  household  as  their  true  career. 
For  this  reason  they  do  not  concentrate  their  attention  upon 
their  calling  with  the  same  singleness  of  eye  as  men  show. 
Nor  have  they,  as  a  rule,  the  same  power  of  continuous  applica- 
tion, although  they  have  far  more  natural  quickness.  The 
superintendent  of  the  Elgin  Watch  Factory  told  me  that  the 
women  employed  there  learnt  far  more  during  their  first  fort- 
night than  men  didj  but  there  they  stopped,  while  the  men 
went  on  learning  all  their  lives. 


wOxMan's  work  and  wagks.  Ml 

(2)  Through  the  limitation  of  the  number  of  employ menta 
open  to  women,  they  are  driven  to  underbid  each  other  for  work. 
By  "  employments  open  to  women  "  are  meant  those  that  their 
prejudices  will  allow  them  to  enter,  not  merely  those  that  are 
fit  for  their  sex  to  undertake.  The  position  of  household  ser- 
vant, for  instance,  is  one  that  very  few  American-born  white 
women  will  now  accept.  Nor  is  it  of  any  use  to  argue  the  ques- 
tion, or  to  hold  up  the  example  of  a  few  ladies  of  high  culture 
and  slender  purse;  the  position  of  direct  control  by  an  indi- 
vidual will,  that  is  bound  by  no  rules  save  such  as  it  extoniporizes 
from  time  to  time,  is  become  intolerable  to  them.  They  fly  from 
it  to  the  store,  the  factory,  the  school-room,  and  finding  all  these 
insufficient,  they  will  sew  for  slop-shops  and  die  of  slow  starva- 
tion rather  than  go  to  the  kitchen.  German  and  Irish  women, 
and  Chinese  men,  are  the  only  material  to  be  had  to  fill  these 
vacancies,  to  the  varied  discomfort  of  the  mistresses  of  the 
households. 

The  plan  of  cooperative  housekeeping  in  cities  and  towns 
offers  a  solution  of  the  difficulty.  By  this,  cooking  would  be 
conducted  in  a  large  central  establishment,  under  the  manage- 
ment of  superior  chefs^  and  the  purchases  made  by  experienced 
caterers  under  the  direction  of  a  committee  of  housekeepers. 
This  change  would  be  in  the  same  line  as  that  which  removed 
the  work  of  spinning  and  weaving  from  the  list  of  household 
duties ;  it  would  cheapen  living  to  both  rich  and  poor,  by 
enabling  wholesale  purchases;  it  would  give  an  opportunity  for 
the  application  of  scientific  principles  to  the  art  of  cooking;  and 
it  would  furnish  congenial  and  well-paid  work  to  a  large  per- 
centage of  the  women  now  out  of  employment.  Nor  would  it 
be  impossible  to  apply  the  same  cooperative  principle  to  other 
parts  of  household  work,  and  relieve  the  mistress  of  the  family 
from  the  necessity  of  depending  on  the  services  of  a  class,  who 
— with  some  exceptions — are  certainly  not  improved  and  human- 
ized by  their  position. 


CHAPTER  EIGHTH. 
The  Science  and  Economy  of  Money. 

§  142.  The  progress  of  society  from  slavery  and  poverty  and 
isolation  to  freedom,  wealth  and  association,  involves  not  only  a 
progressive  differentiation  of  its  members  and  of  their  functions, 
but  also  a  constantly  increasing  interchange  of  services  between 
these.  The  more  developed  the  society,  the  greater  the  inter- 
dependence of  its  members,  and  the  more  numerous  and  rapid 
these  exchanges.  With  the  solitary  backwoodsman  they  have 
no  existence,  and  he  must  overcome  nature's  resistance  and 
master  her  utilities  unaided.  But  when  the  country  begins  to 
be  settled,  these  exchanges  begin  ;  if  a  town  spring  up,  they 
become  more  numerous  and  rapid ;  if  the  town  grow  into  a  city, 
the  system  of  mutual  service  becomes  complete. 

These  exchanges  are  at  first  effected  by  barter,  or  the  direct 
exchange  of  commodity  for  commodity.  But  a  little  experience 
shows  this  process  to  be  both  awkward  and  wasteful.  The 
artisan  might  waste  more  time  than  he  spent  to  produce  his 
commodity,  in  searching  for  a  customer  whose  wants  and  pos- 
sessions were  the  exact  complement  of  his  own.  Where  a  single 
article  that  varied  in  the  value  of  its  parts,  such  as  the  carcass 
of  a  cow,  had  to  be  divided  among  a  great  number  of  customers, 
the  adjustment  of  values  was  nearly  impossible.  This  led  to 
the  setting  apart  some  one  commodity  which  should  be  the 
representative  of  all  estimable  values,  and  should  be  the  instru- 
ment of  these  exchanges  and  therefore  of  human  association  for 
mutual  help.  Cattle  (pecus),  being  the  first  form  of  personal 
property  {peculium  or  chattels),  was  first  used  as  money  (pecunia). 
Afterwards  silver,  and  probably  somewhat  later  gold  came  into 
use.  The  scarcity  of  these  precious  metals,  and  their  eminent 
fitness  for  making  ornaments,  had,  doubtless,  brought  them  into 
general  demand  and  caused  them  to  be  held  at  a  very  high  price. 
The  transition  to  their  use  as  money  was  gradual  and  natural.  It 
142 


COINED   AND    UNCOINED    MONEY.  143 

is  impossible  to  trace  the  early  history  of  their  adoption.  The 
oldest  historical  records  tell  us  that  they  were  already  in  use, 
though  not  yet  coined,  in  the  patriarchal  age, — that  is,  at  a  time 
when  the  family  was  still  the  largest  social  unit  among  peoples  that 
afterwards  played  a  part  in  ancient  history.  The  first  coins  were 
in  the  form  of  animals,  as  indicating  that  they  were  substitutes 
for  cattle.  Afterwards  they  were  coined  in  small,  flat  masses  of 
equal  weight  and  a  recognised  degree  of  purity,  with  an  image 
and  superscription,  which  now  give  these  pieces  a  great  historical 
interest.       • 

Money  is  therefore  tlie  instrument  of  exchange  and  of  assO' 
ciation.  It  is  more  usually  defined  as  "the  instrument  of 
exchange  and  the  standard  of  value."  In  a  popular,  not  a 
scientific  sense,  it  serves  as  an  instrument  for  the  comparison 
of  values.  But  as  value  is  the  measure  of  nature's  power 
over  man,  and  as  money,  like  every  other  commodity,  falls  in 
value  with  the  growth  of  that  power,  it  is  more  scientific  to 
regard  labor  as  the  standard  of  value,  that  being  the  means  by 
which  nature's  resistance  is  overcome.  It  is  true  that  in  setting 
aside  any  commodity  for  use  as  money  regard  is  had  to  its  com- 
parative fixity  of  value.  This  is  the  consideration  which  deter- 
mined the  selection  first  of  cattle,  and  then  of  the  precious  metals. 
But  neither  these  commodities  nor  any  other  possess  that  fixity 
which  entitles  them  to  rank  as  scientific  standards  alongside  the 
standards  of  weight  and  measure. 

This  usual  definition  errs  also  by  defect.  Money  is  the  iuatrument 
of  association  as  well  as  of  exchange.  The  absence  of  it  tends 
to  isolate  men,  to  prevent  the  formation  of  industrial  relations 
among  them,  and  to  keep  labor  down  to  an  unproductive  level. 
Its  abundance  enables  the  organization  and  drill  of  the  industrial 
forces,  and  the  direction  of  their  energies  to  the  best  purpose. 

Association  is  the  largest  fact  in  economic  experience.  It  is 
the  exchange  of  services  not  only  within  the  range  of  contract, 
but  among  millions  who  never  see  each  other.  The  payment  of 
two  cents  for  a  morning  newspaper  brings  its  purchaser  into  a«. 
Bociation,  to  that  extent,  not  only  with  the  people  actually  engaged 


144  ELEMENTS   OF   POLITICAL   ECONOMY. 

in  its  editing,  composition  and  press-work,  but  with  paper-makers, 
ink-makers,  miners,  lumberers,  telegraph-agents  and  so  forth. 

§  143.  The  adoption  of  any  form  of  money  as  the  instrument 
of  association  and  exchange  was  a  clear  advance  upon  barter. 
In  barter  every  commodity  discharges  two  functions  at  the  same 
time  ;  it  is  both  goods  and  money.  In  the  new  method  of  ex- 
shange  the  two  functions  are  separated;  money  and  goods 
become  separate  things.  Nor  is  a  vast  amount  of  material 
thereby  withdrawn  from  other  uses :  a  very  small  amount  of 
money  suffices  to  effect  a  very  large  number  of  exchanges,  and 
no  country  needs  anything  like  as  much  money  as  it  has  pro- 
perty ;  it  might  as  well  have  wagons  and  railroad  carriages 
enough  to  convey  all  its  movables  at  once.  Very  much  of  its 
property  never  changes  hands,  except  by  inheritance;  a  still 
larger  amount  not  once  in  a  long  series  of  years.  At  most  a  very 
small  amount  changes  hands  in  the  course  of  a  single  day,  and 
there  is  no  use  for  as  much  money  as  will  represent  this  amount. 
The  same  sum  (be  it  coin,  or  notes,  or  credit  represented  by  a 
check)  may  be  used  repeatedly  in  the  same  day,  and  thus  dis- 
charge many  times  its  own  amount  of  indebtedness.  The  most 
perfect  money  is  that  which  changes  hands  with  greatest 
rapidity ;  the  more  rapid  its  circulation  the  greater  its  useful- 
ness. "  The  proportion  borne  by  money  to  commerce  decreases 
in  advancing  societies'^  (Carey),  and  by  consequence  its  rate  of 
interest,  or  the  price  paid  for  the  use  of  money,  falls  with  every 
advance  in  its  usefulness.  Brutus  got  fifty  per  cent,  a  year; 
Rothschild  will  lend  at  four. 

The  precious  metals  have  many  quaUties  that  fit  them  for  use 
as  coined  money.  They  are  not  liable  to  rust;  they  are  easily 
alloyed  with  baser  metals  and  as  easily  separated ;  they  receive 
a  stamped  impression  easily  and  retain  it  firmly ;  they  are  not 
easily  worn  or  abraded  ;  they  are  readily  distinguished  from 
other  metals.  Their  defects  are  their  weight,  their  intrinsic  value 
as  commodities,  and  hence  the  real  loss  of  value  by  such  abra- 
sions as  they  suff"er.  So  long  as  we  use  as  money  what  possesses 
a  very  considerable  value  for  other  purposes,  and  is  liable  to  be 


VALUE   OF    THE    PRECIOUS    METALS.  1  t.> 

diverted  to  other  uses,  wo  cannot  be  said  to  have  attained  tho 
complete  separation  of  the  function  of  money  from  that  of  com- 
modities. 

That  these  metals  should  be  used  at  all  as  money  is  a  matter 
of  convection  or  general  agreement  merely.  But  that  conven- 
tion once  established,  their  value  in  circulation,  like  all  other 
values,  is  not  conventional,  but  is  determined  by  the  cost  of 
reproduction.  If,  however,  the  general  agreement  to  use  them 
as  money  were  to  cease,  and  they  were  to  be  demonetized,  the 
excessive  supply  for  other  uses  would  cause  their  purchasing 
power  to  decline  very  greatly.  Their  intrinsic  utility  would,  in- 
deed, be  more  generally  made  use  of,  since  they  would  be  fai 
more  generally  employed  in  the  arts  than  at  present,  and  in  this 
respect  there  would  be  a  net  gain  to  mankind  in  the  change. 
Their  use — especially  that  of  gold — as  ornaments  would  cease 
on  this  decline  in  price,  and  this  would  make  them  still  cheaper. 
However  well  fitted  their  color  and  brilliancy  to  attract  the  eye 
and  please  the  fancy  of  childish  savages,  the  refined  taste  of 
civilized  man  would  cast  them  aside  as  barbarous.  They  still 
hold  their  place  in  the  toilet  because  they  are  "  condensed 
wealth,  the  trophies  of  industrial  warfare,"  analogous  to  the 
savage's  string  of  scalps.  Very  few  of  the  articles  made  of 
them  have  any  artistic  merit. 

§  144.  They  are  diflScult  of  reproduction,  and  therefore  valu- 
able, because  they  are  scanty  in  supply  and  hard  of  access  in 
their  natural  deposits.  Gold  especially  is  found  in  very  small 
quantities,  and  to  dig  for  it  is — considering  the  number  of  per- 
sons employed  in  it — the  most  unprofitable  of  human  employ- 
ments. It  has  the  fascination  of  a  lottery,  in  which  a  few  suc- 
ceed, but  thousands  fail.  The  Mexicans  have  a  saying  that  he 
who  mines  for  copper  will  grow  rich ;  he  who  digs  for  silver  may 
or  may  not;  he  who  seeks  gold  never  will.  Were  it  otherwise, 
success  would  defeat  itself,  through  the  decline  in  the  value  of 
its  products. 

These  metals  are,  therefore,  a  very  expensive  instrument  for 
eflfecting  exchanges.  They  require  a  vast  outlay  of  capital,  labor 
10 


146  ELEMENTS   OF    POLITICAL   ECONOMY, 

and  intelligence,  that  might  otherwise  be  expended  in  producing 
what  would  directly  meet  and  satisfy  the  primal  needs  of  hu- 
manity. "  It  is  a  heavy  price,  and  each  ounce  of  gold  repre- 
sents so  much  labor  withdrawn  from  agriculture  and  other  indus- 
trial pursuits,  which  minister  directly  to  the  comforts  and 
necessities  of  mankind." 

See  R.  H.  Pattevson's  Economy  of  Capital  (1864). 

These  two  metals  do  not  circulate  equally  in  all  parts  of  the 
world,  nor  is  their  purchasing  power  the  same  everywhere. 
Since  1771  gold  alone  is  "  legal  tender"  for  large  payments  in 
England;  i.  e.,  is  such  an  offer  of  payment  as  the  creditor  must 
accept  or  forfeit  his  claim  to  interest. 

At  the  beginning  of  our  own  government  both  gold  and  silver 
were  made  legal  tender,  but  owing  to  circumstances  silver  was  the 
metal  chiefly  employed.  In  1834  the  standard  of  our  coinage 
was  changed  from  1  :  15  to  1  :  16,  thus  favoring  the  use  of 
gold.  Silver-using  countries  of  Europe  sent  us  gold  in  exchange 
for  our  silver,  thus  effecting  a  profit  to  themselves  at  a  loss  to 
us.  In  1873  a  law  was  passed,  without  much  consideration,  de- 
monetizing silver;  but  in  1878  this  law  was  repealed.  Silver 
was  again  made  legal  tender,  and  its  coinage  in  limited  quanti- 
ties for  government  account  was  ordered.  The  law  of  1873  was 
prompted  by  the  change  which  had  taken  place  in  Europe.  In 
1871,  Grermany,  taking  advantage  of  the  large  accumulation  of 
gold  in  her  treasury  through  the  payment  of  the  French  war-in- 
demnity, determined  to  substitute  that  metal  for  the  silver  of 
which  her  coinage  had  been  made  chiefly.  A  few  of  the  lesser 
states  followed  this  example  of  demonetizing  silver,  and  the 
states  of  the  Latin  Union  which  still  retain  it  in  use  have  been 
forced  to  suspend  its  coinage.  Germany  was  moved  to  take  this 
step  partly  by  the  example  of  England,  and  partly  by  exagger- 
ated reports  of  the  productivity  of  our  Nevada  mines.  She  has 
sustained  serious  losses  in  consequence  of  it,  since  she  has  not 
been  able  to  dispose  of  the  silver  which  she  called  in,  except  at 
a  much  lower  price;   and  the  knowledge  that  she  holds  large 


EFFECTS   OF   DEMONETIZING!    SILVER.  147 

amounts  for  a  rise  in  the  market  hsis  tended  to  keop  the  market 
depressed.  Besides  the  discredit  thus  brought  upon  silver  by 
hiws  I'or  its  demonetization,  its  price  has  been  affected  through  a 
serious  interruption  of  its  outflow  from  the  silver-producing  to 
the  silver-using  nations.  Formerly  the  East  India  trade  carried 
to  the  East  a  large  amount  of  surplus  silver  every  year.  But 
since  India  became  heavily  indebted  to  England  through  loans 
raised  in  England  to  pay  for  railroads  and  other  public  works  in 
India,  the  East  Indian  government  has  to  meet  the  interest  on 
these  bonds  in  London  by  large  sales  of  exchange  on  Calcutta. 
As  a  consequence  the  export  of  silver  to  pay  balances  of  trade 
due  to  India  has  been  stopped,  and  this  surplus  accumulates  in 
Europe  to  the  disadvantage  of  the  holders  of  this  metal. 

It  is  generally  recognized  that  this  process  of  discrediting  silver 
by  demonetization  must  come  to  an  end,  and  several  international 
conferences  have  been  held  to  secure  its  general  restoration  to  the 
coinage  of  the  world.  But  thus  far  there  has  been  no  result  from 
these,  as  the  nations  which  employ  gold  exclusively  show  no  dis- 
position to  retrace  their  steps,  and  the  others  will  not  resume  the 
coinage  of  silver  until  they  do  so. 

It  is  argued  by  the  opponents  of  the  restoration  of  silver  that 
the  supply  of  that  metal  has  been  excessive  and  irregular  for 
years  past,  and  that  there  is  no  reason  to  expect  anything  but  a 
continuance  of  this.  The  figures,  however,  show  that  the  annual 
product  of  gold  and  silver  taken  together  is  much  more  constant 
and  regular  than  is  the  product  of  either  of  them.  It  is  also 
said  that  silver  having  fallen  below  its  former  value,  remonetiza- 
tion  would  only  result  in  flooding  the  world  with  a  debased  coin- 
age. But  the  fall  of  silver  is  due,  not  so  much  to  any  increase 
in  the  product,  as  to  the  cessation  of  the  demand  for  it  in  the 
mints  of  the  world.  A  general  agreement  on  the  part  of  Europe 
and  America  to  restore  the  free  coinage  at  the  old  ratio  would 
retrieve  and  maintain  its  price. 

On  the  other  hand,  the  continued  demonetization  of  silver  must 
cause  such  a  diminution  of  the  supply  of  coin  as  cannot  but  re- 
sult in  the  most  serious  disturbances  to  domestic  and  international 


148  ELEMENTS   OF   POLITICAL   ECONOMY. 

commerce.  The  mischief  already  done  by  demonetization  cannot 
terminate  until  other  countries  have  been  forced  to  abandon  silver. 
They  cannot  afford  to  go  on  using  a  metal  which  their  neighbors 
have  discredited,  and  which  they  refuse  to  take  in  payment  of 
balances  of  trade.  Their  business,  in  so  far  as  coin  is  necessary 
to  it,  will  have  to  be  transacted  by  means  of  the  very  inadequate 
gold  coinage  they  possess  or  can  procure.  In  Europe  this  will  be 
felt  much  more  quickly  and  severely  than  in  America,  for  the 
present  conditions  of  international  trade  and  those  we  fairly  may 
expect  for  the  future,  tend  to  transfer  to  America  a  large  part  of 
the  gold  supply  of  Europe. 

In  the  East  gold  has  never  been  a  circulating  medium ;  China 
will  not  accept  it  in  payment  for  her  teas  and  silks  j  in  India 
gold  mohurs  are  coined,  but  have  never  been  legal  tender.  Dur- 
ing the  panic  of  1866,  Calcutta  merchants  offered  20,000^.  in  gold 
at  the  banks,  but  could  not  obtain  even  bank  notes  in  exchange. 
To  demonetize  silver  in  the  West  would  be  to  interpose  a  serious 
obstacle  to  commerce  with  the  East.  This  commerce  is  of  im- 
portance, as  covering  many  articles  to  be  found  only  in  the  East. 

Cowries,  a  species  of  shell,  are  used  in  the  native  kingdoms  of  Central 
Africa  and  some  parts  of  India.  Part  of  the  land  revenue  of  Orissa  is 
paid  in  them,  at  the  rate  of  6000  or  7000  to  the  rupee.  Similar  were  the 
wampum  belts  of  our  Indians.  Carthage  hn  i  a  coinage  of  metal 
enclosed  in  stamped  leather;  Sparta  had  an  intentionally  cumbrous  one 
of  iron.  Russia  during  the  present  century  tried  to  get  coins  of  plati- 
num into  circulation,  but  they  were  bought  up  and  withdrawn  because 
of  the  too  great  variation  in  the  commercial  value  of  platinum.  Copper 
and  bronze  have  been  commonly  used  for  coins  of  small  value,  but  lat- 
terly an  alloy  of  nickel  and  copper  has  been  adopted  by  several  of  the 
most  enlightened  nations  as  the  best  material  for  small  coins. 

§  145.  The  "  precious  metals"  are  often  spoken  of  as  "  the 
standard  of  value/'  which  is  true  only  in  a  restricted  sense.  A 
standard  must  remain  the  same,  however  other  things  change  ; 
and  this  is  certainly  not  true  of  gold  and  silver.  Their  pur- 
chasing power  has  been  continually  varying,  generally  declining, 
as  the  natural  deposits  of  their  ores  have  been  laid  bare,  and 
the  resistance  of  nature  to  those  who  searched  for  them  has 


THE  VALUE  OP  GOLD  VARIABLE.         149 

diiiiiui.shed.  Vast  quantities  of  them  were  furnished  to  Europe 
by  Spanish  America  from  the  conquest  of  Mexico  and  l*eru, 
till  the  revolt  of  those  colonies  in  1810.  During  the  thirty 
years  that  followed,  the  supply  was  largely  interrupted,  and  the 
supply  of  money  in  other  forms  was  hindered  by  restrictive  legis- 
lation. It  was  a  time  of  great  popular  distress,  and  of  em- 
barrassment to  the  money  markets  of  the  world.  Commerce 
and  manufactures  were  growing,  but  the  instrument  of  ex- 
change was  nearly  a  fixed  quantity.  In  1840  Russia  began  to 
work  the  Ural  mines:  the  gold  discoveries  in  California  (1848) 
and  in  Australia  (1854)  came  next.  Since  then  the  annual 
increase  of  coined  money  has  been  nearly  quadrupled,  and  a  vast 
extension  of  commerce  and  manufactures  has  followed  through- 
out the  world. 

While  both  the  periods  of  increase  have  seen  a  decline  in  the 
purchasing  power  of  gold  and  silver,  in  neither  of  them  has  it 
fallen  in  anything  like  the  ratio  of  increase.  Humboldt  esti- 
mates that  in  the  eighteenth  century  there  were  thirty  times  as 
much  coin  in  circulation  as  in  the  fifteenth  ;  yet  money  had,  on 
the  very  highest  estimate,  only  twelve  times  as  much  purchasing 
power  at  the  era  of  the  Reformation  as  at  present.  When  the 
new  flow  of  gold  into  Europe  began,  economists  of  the  English 
echool  (Chevalier,  Cobden,  etc.),  predicted  a  rapid  fall  in  its 
value  J  others  of  the  same  school  (Cairnes,  Jevons,  etc.),  claim 
that  this  has  been  the  case  to  some  extent,  say  tea  or  fifteen  per 
cent.  But  even  this  much  is  not  universally  admitted.  **  We 
haveueen,"  says  R.  H.  Patterson,  "  three  hundred  million  pounds 
added  to  the  general  currency  within  fifteen  years,  with  so  little 
effect  that  it  is  still  doubted  by  many  authorities  whether  there 
has  been  any  depreciation  at  all."  A  small  depreciation  seems, 
however,  to  have  taken  place. 

§  146.  On  the  principles  generally  accepted  by  the  English 
school,  and  first  enunciated  by  David  Hume  in  1752,  the  rate 
of  decrease  in  value  should  have  been  exactly  proportional  to 
the  increase  in  amount.  He  says  that "  the  only  influence  wliich 
a  greater   abundance   of  coin    has   in    the    kingdom"    is  "  by 


150  ELEMENTS    OF    POLITICAL    ECONOMY. 

heightening  the  price  of  commodities  and  obliging  every  one  to 
pay  a  greater  number  of  these  little  yellow  or  white  pieces  for 
everything  he  purchases."  He  admits  indeed  a  temporary  effect 
of  quite  another  kind :  "  In  every  kingdom  into  which  money 
begins  to  flow  in  greater  abundance  than  formerly,  everything 
takes  a  new  face;  labor  and  industry  gain  life;  the  merchant 
becomes  more  enterprising,  the  manufacturer  more  diligent  and 
skilful,  and  even  the  farmer  follows  his  plough  with  greater 
alacrity  and  attention." 

Mr.  J.  S.  Mill  applies  the  well-worn  formula  of  demand  and 
supply  to  the  subject  in  this  way  :  "  The  demand  for  money 
consists  of  all  the  goods  offered  for  sale.  .  .  .  The  money  and 
the  goods  are  seeking  each  other  for  the  purpose  of  being  ex- 
changed." Again  :  "  If  the  whole  money  in  circulation  was  dou- 
bled, prices  would  be  doubled;  if  it  was  only  increased  one-fourth, 
prices  would  rise  one-fourth."  Mr.  Mill  does  not  appear  to  be 
aware  of  the  fact  that  all  but  a  small  percentage  of  purchases 
are  paid  for  by  offset  (checks,  bills  of  exchange,  etc.),  without 
the  use  of  coin. 

§  147.  The  element  of  truth  in  this  mechanical  theory  is 
separated  from  the  falsehood  in  Mr.  Patterson's  statement :  "  An 
addition  to  the  currency  of  a  country  is  not  necessarily  a  benefit. 
...  If  the  currency  be  doubled,  while  the  productions  of  that 
country  and  the  demand  for  money  remain  as  they  were,  the 
double  amount  will  do  no  more  than  the  lesser  one, — only  all 
prices,  wages,  rents,  etc.,  will  be  doubled  in  amount.  The 
prices  which  a  farmer  or  manufacturer  gets  for  his  goods  will  be 
increased;  but  so  also  in  similar  proportion  will  be  the  amount 
of  his  outlay  in  rent  and  taxes.  It  is  like  adding  to  both  sides 
of  an  equation.  It  would  be  a  sheer  waste  of  money.  ...  A 
case  like  this,  however,  never  occurs  in  the  actual  world."  And 
why  ?  Because  in  the  actual  world  money  is  always  drifting  to 
the  nations  whose  industry  and  enterprise  give  it  the  highest 
utility, — to  the  nations  whose  increased  productiveness  and  in- 
creased demand  for  money  furnish  a  sphere  of  usefulness  to  the 
Increase, — to  the  nations  whose  worth,  honor  and  intelligence 


MORE   rUODUCTION.  151 

make  them  the  safest  depositaries  of  the  world's  h)osc  cash, 
and  thus  the  centres  of  credit.  England  has  raised  her  coiu 
circulation  to  150,000,000/.,  but  her  annual  savings  arc  between 
a  hundred  and  a  hundred  and  thirty  millions.  The  vast  quan- 
tities of  the  precious  metals  that  flowed  into  Europe  after  the 
discovery  of  America,  may  well,  in  the  absence  of  new  enter- 
prises and  industries  to  employ  it,  have  had  a  different  effect, 
and  produced  '*  a  dearness  of  all  things  without  a  dearth  of 
anything."  Europe — especially  Spain — was  industrially  inert, 
incapable  of  safely  absorbing  so  large  a  quantity  of  the  precious 
metals,  incapable  of  receiving  the  industrial  impulse  they  would 
most  naturally  have  imparted.  The  lack  of  stimulating  in- 
fluence on  a  stagnant  and  stationary  society  is  seen  in  India  and 
China,  which  absorb  every  year  850,000,000  in  silver,  only  to 
hoard  it  away. 

§  148.  The  influx  of  money  into  a  progressive  country  is  one 
of  the  most  powerful  promoters  and  increasers  of  production. 
To  money  (as  to  labor)  <^  time  is  money ;"  whoever  possesses 
it  must  seek  an  investment  for  it,  or  lose  the  profits  j  when  it  is 
plenty,  all  sorts  of  productive  work  are  stimulated ;  labor  is  the 
master  of  capital,  and  industrial  enterprise  gains  a  more  than 
proportionally  larger  return  for  its  outlay,  with  every  increase 
of  the  outlay.  Labor  becomes  more  productive  as  the  instru- 
ment of  association  is  more  universally  accessible.  Its  price  rises 
while  that  of  commodities  falls. 

The  drain  of  money  away  from  a  country  does  not  make  it — 
as  some  have  said — "  a  good  place  to  buy  in  but  a  bad  place  to 
sell  in," — just  the  reverse.  It  makes  it  a  bad  place  in  which 
to  buy  anything  but  special  products  of  its  soil  or  climate, 
because  although  labor  is  cheap,  the  commodities  produced  by 
labor  are  dear  through  its  inefficiency.  It  makes  it,  therefore,  a 
good  place  for  the  sale  of  the  merchandise  of  countries  more 
happily  situated.  "  To  him  that  hath  shall  be  given."  Money 
tends  to  where  money  is ;  start  a  shilling  in  circulation  in  Thibet 
or  Central  Africa,  and  the  chances  are  that  it  will  turn  up  in 
London.     It  will  do  so,  because  the  presence  of  great  accuuiu- 


152  ELEMENTS   OF   POLITICAL   ECONOMY. 

lations  of  capital  in  England,  have  made  English  labor  produc- 
tive to  a  degree  that  outweighs  all  other  considerations, 

§  149.  For  the  same  reason,  the  money  market  in  poor  countries 
always  tends  towards  stringency.  However  great  may  have  been 
the  recent  supply,  it  is  speedily  drawn  off  into  a  thousand  side 
channels,  and  the  main  stream  is  diminished.  The  effect  of  this 
is  far  more  than  proportional  to  the  amount  involved,  for  this 
market  is  extremely  sensitive.  On  the  first  intimation  of  a 
scarcity,  the  rate  rises,  and  they  who  must  have  money  to  pay  the 
current  expenses  of  large  establishments,  or  to  meet  their  out- 
standing obligations,  are  at  the  mercy  of  the  lender.  The  cap- 
tains of  industry,  and,  through  them,  their  laborers,  are  no 
longer  the  masters  but  the  servants  of  capital. 

§  150.  A  second  form  of  money,  and  one  that  is  in  many  re- 
pects  superior  to  coin,  is  paper-money.  It  is  open  to  none  of 
the  objections  that  we  have  presented  to  the  use  of  gold  and 
silver.  It  wears  out  sooner,  indeed,  but  can  be  replaced  at  a 
trifling  cost ;  its  production  withdraws  no  large  portion  of  the 
race  from  productive  industry ;  its  use  abstracts  from  the  arts  no 
substance  of  intrinsic  value;  it  circulates  more  rapidly  than 
gold  because  it  represents  great  values  by  a  smaller  bulk,  and  is 
easier  of  transfer.  And  when,  as  can  be  accomplished  by  wise 
legislation,  the  public  have  security  that  the  note  is  really  issued 
by  the  firm  that  it  professes  to  come  from,  and  that  that  firm  is 
able  to  meet  all  just  demands  upon  it,  the  last  objection  to  its 
use  is  removed.  If  barter  may  be  compared  to  the  rude  mode 
of  transportation  on  human  backs,  and  coin  to  transportation  in 
carriages  drawn  by  horses,  paper-money  is  the  steam-carriage, 
whose  use  calls  for  larger  precautions  against  danger,  but  whose 
superior  utility  far  outweighs  that  consideration. 

The  earliest  form  of  paper-money  was  the  bill  of  exchange. 
From  a  letter  of  Cicero  to  his  brother  Atticus,  directing  him  to 
obtain  a  sum  of  money  at  Athens,  we  learn  that  this  or  some- 
thing equivalent  to  it  existed  in  antiquity.  It  was  reinvented 
in  the  Middle  Ages,  not  by  the  Jews,  but  by  the  Cuursins,  a 
class  of  money-changers  employed  by  the  Papal  See  in  the  col- 


THE   BILL   OF   EXCHANGE.  153 

lection  and  transmission  of  its  revenue  from  all  parts  of  Europe 
to  Rome  or  Avignon.  The  Hanse  towns  adopted  it,  and  it 
passed  into  currency  as  one  of  the  ordinary  methods  of  com- 
merce  between  distant  traders. 

By  this  plan  a  debtor  in  Hamburg,  who  wishes  to  pay  his 
London  creditor,  goes  "  on  'change "  and  buys  of  a  discount 
house  a  draft  on  London  for  the  amount.  This  draft  has  pre- 
viously been  drawn  by  some  Hamburg  merchant  upon  his  London 
debtor,  and  sold  by  him  to  the  discount  house  for  a  trifle  less 
than  the  market  rate  of  exchange.  This  exchange  is  "  in  favor 
of  Hamburg  "  when  drafts  on  London  are  plenty  and  sell  for  a 
small  percentage  less  than  the  "  face  value."  It  is  "  against 
Hamburg  "  when  the  reverse  is  the  case  ;  and  unless  the  course 
of  exchange  changes,  some  specie  will  in  that  case  have  to  bo 
exported  from  Hamburg  to  London  to  restore  the  balance. 
The  amount  of  the  discount  or  the  premium  on  bills  of  exchange 
can  never  be  greater  than  the  cost  of  transmitting  specie,  in- 
cluding interest  and  insurance.  By  this  method,  it  will  be  seen, 
the  debts  of  London  merchants  to  Hamburg  merchants  are  paid 
by  set-oflf  against  the  debts  of  Hamburg  merchants  to  London 
merchants,  and  the  amount  of  money  exchanged  between  the 
two  cities  is  reduced  to  a  minimum. 

§  15L  The  advantages  of  this  plan  are  so  great  that  the 
advantage  of  something  like  it  for  the  transaction  of  business 
within  each  city  was  readily  seen,  and  banks  of  deposit  and 
issue  were  established  as  early  as  the  fifteenth  century.  The 
first  Italian  banks,  however,  were  mere  associations  of  the  public 
creditors  in  each  city  for  the  joint  care  of  their  interests,  and 
when  they  became  banks  in  the  modern  sense,  they  did  not  begin 
the  issue  of  paper-money,  but  dealt  only  in  money  of  account, 
which  is  yet  to  be  described.  The  same  is  true  of  the  banks  of 
Amsterdam,  Hamburg,  and  Stockholm.  By  1673  we  find  the 
Bank  of  Genoa  issuing  bills  of  pretty  large  amount,  which 
passed  into  circulation  for  wholesale  transactions.  About  the 
same  time  the  English  goldsmiths  began  the  practice  of  issuing 
bills  which  circulated  iu  the  same  way,  and  when  in  1694  the 


154  ELEMENTS   OF   POLITICAL    ECONOMY. 

Bank  of  England,  and  in  1605  the  Bank  of  Scotland,  were 
established,  the  issue  of  these  bank-notes  to  those  who  bor- 
rowed money  was  a  feature  of  each  institution.  These  were  at 
first  'Hime-notes"  bearing  a  low  rate  of  interest^  and  conse- 
quently certain  to  be  presented  for  redemption.  Growing  a  little 
bolder,  the  Bank  of  England  issued  demand  notes  that  bore  no 
interest,  and  these  passed  rapidly  into  circulation,  imparting  a 
vigorous  impulse  to  all  sorts  of  business.  As  the  country  really 
needed  these,  it  was  almost  impossible  that  any  large  quantity 
of  them  could  be  presented  for  redemption  at  once,  except  ia 
cases  of  extraordinary  panic.  Of  course  the  bank  was  enabled 
to  extend  its  discounts  far  beyond  the  amount  of  coin  at  its 
command.  For  the  bank  did  not — no  bank  could — keep  on 
hand  specie  enough  to  redeem  its  entire  circulation.  It  was 
sufficient  if  it  kept  as  much  as  experience  showed  would  meet 
the  largest  ordinary  demand  for  it. 

Such  was  the  genesis  of  the  modern  bank-note,  which  has 
been  one  of  the  most  powerful  agents  to  promote  and  fertilize 
industry.  To  establish  a  bank  of  issue  in  a  community  where 
none  has  existed  before,  is  to  coin  the  mutual  credit  and  confi- 
dence of  the  people  into  available  money.  It  is  to  bring  men  into 
closer  and  more  helpful  association,  by  furnishing  a  new  supply 
of  the  instrument  of  association  and  of  the  exchange  of  ser- 
vices. It  is  to  put  the  means  of  industrial  activity  into  the 
hands  of  those  captains  of  industry  who  will  open  avenues  of 
useful  employment  to  the  idle  and  the  dependent.  It  is  to 
recall  from  distant  banks,  and  to  draw  out  of  old  stockings  and 
cash-boxes,  the  accumulated  savings  of  the  community,  and 
make  them  doubly  efficient  in  the  promotion  of  local  interests. 
By  adding  to  the  rapidity  of  societary  circulation  it  adds  new 
profits  to  every  bargain,  and  gives  a  new  efficiency  to  every  blow 
on  the  anvil,  a  new  value  to  the  crops  in  every  field. 

Sir  Walter  Scott  says  of  the  Scotch  system  of  banks  of  issue  . 
"The  facilities  which  it  has  afi"orded  to  the  industrious  and 
enterprising  agriculturist  or  manufacturer,  as  well  as  to  the 
truist«os  of  the  public  in  executing  national  works,  have  con- 


HOW    TO    MAKE    BANK-NOTES    SAFE.  1,55 

vcrttd  Scotland  from  a.  poor,  miserable  and  barren  country  into 
one  where,  if  nature  has  done  less,  art  and  indu.stry  have  dono 
more  than  in  perhaps  any  country  in  Europe,  England  not 
excepted.  Through  the  means  of  credit  which  this  system 
afforded,  roads  have  been  made,  bridges  built,  and  canals  dug, 
opening  up  to  reciprocal  communication  the  most  sequestered 
districts  of  the  country;  manufactures  have  been  established, 
unequalled  in  extent  or  success, — wastes  have  been  converted 
into  productive  farms, — the  productions  of  the  earth  for  human 
use  have  been  multiplied  twenty  fold,  while  the  wealth  of 
the  rich  and  the  comforts  of  the  poor  have  been  extended  in 
the  same  proportion.  And  all  this  in  a  country  where  the 
rigor  of  the  climate  and  the  sterility  of  the  soil  seemed  united 
to  set  improvement  at  defiance.  Let  those  who  remember 
Scotland  forty  years  since  bear  witness  if  I  speak  truth  or  false- 
hood." 

See  "Malachi  Malagrowther's "  Letters  on  the  Proponed  Change  in  the 
Currency  (Edinburgh,  1826). 

§  152.  The  community,  in  using  the  notes  of  the  bank  as 
money,  pass  a  vote  of  confidence  in  the  general  solvency.  They 
are  authorizing  the  directors  to  monetize  a  small  portion  of  the 
capital  of  the  neighborhood,  that  the  utility  of  the  rest  and  the 
facility  of  its  transfer  may  be  increased.  They  are  passing,  at 
the  same  time,  a  vote  of  confidence  in  the  honesty  and  prudence 
of  those  directors. 

*'  What  security  have  we  that  the  confidence  thus  extended 
will  not  be  abused  ?"  Two  :  (1)  government  inspection  should 
be  continually  exercised  over  every  such  institution,  and  should 
extend  to  all  the  details  of  its  management.  Of  course  this 
implies  no  publication  of  the  bank's  affairs,  save  when  the  re- 
sults are  such  as  to  justify  its  dissolution. 

(2)  Under  restrictions  imposed  by  general  laws,  any  number 
of  citizens  should  be  as  much  at  liberty  to  establish  a  bank  as 
to  open  a  store  to  sell  dry-goods.  The  profits  of  legitimate  bank- 
ing are  always  large  enough  to  attract  thither  capital  sufficient  to 
supply  safely  all  the  demand  for  paper-money  and  dibcouuta.     It 


156        ELEMENTS  OF  POLITICAL  ECONOMY. 

is  only  wKen  the  business  is  made  a  monopoly,  and  confined  to  a 
small  number  of  firms,  that  their  limited  capital'  is  unequal  to 
the  demand  for  money  made  upon  them  by  the  community. 
The  best  guarantee  for  safety  is  freedom. 

The  supposed  danger  that  over-issues  are  practicable,  and 
that  they  may  not  only  bring  the  holder  of  bank-notes  into  a 
position  of  risk,  but  also  derange  the  whole  market  for  money, 
and  with  it  all  other  markets,  is  in  the  main  a  mere  bugbear. 
Banks  do  not  break  down  because  their  note  circulation  is  too 
large,  but  because  the  other  departments  of  their  business  are 
so  badly  managed  that  their  notes,  be  they  few  or  many,  have 
no  guarantee  behind  them.  A  bank  can  ordinarily  put  into 
circulation  no  more  notes  than  the  community  needs.  The 
avenues  of  return  are  always  more  open  to  the  public  than  those 
of  issue  to  the  directors.  But  one  class  of  English  economists 
have  said  "  over-issue "  so  often  that  they  are  ready  to  stake 
their  reputation  as  financiers  upon  this  theory,  which  is  sustained 
by  no  facts,  and  is  disputed  by  the  ablest  men  (Tooke,  Ash- 
burton,  FuUarton,  etc.)  of  their  own  school.  "  It  was  a  pair  of 
spectacles  which  the  Bullion  Committee  [of  1811]  left  as  a 
legacy  to  the  subsequent  generation,  and  which  became  the 
medium  through  which  all  our  monetary  difficulties  were  viewed. 
The  increase  of  the  bank's  issues  to  the  extent  of  a  milHon  or 
two  above  the  ordinary  amount,  was  held  capable  of  producing 
the  most  momentous  consequences.  It '  depressed  the  currency,' 
and  was  the  parent  of  our  recurrent  monetary  crises.  The  up- 
holders of  this  theory,  it  is  true,  never  demonstrated  by  a  refer- 
ence to  prices  that  the  currency  was  depressed.  They  took 
that  for  granted,  and  a  good  deal  more  besides"  (R.  H.  Patter- 
son). 

§  153.  The  third  and  the  most  perfect  form  of  money  is 
money  of  account.  It  possesses  in  a  still  higher  degree  all  the 
advantages  that  make  paper-money  better  than  coin.  It  passes 
in  circulation  most  rapidly;  it  performs  the  vastest  amount  of 
service  in  proportion  to  its  amount;  its  use  involves  no  loss  by 
wear ;  its  production  is  so  nearly  costless  that  its  cost  hardly 


TUE  BANKS  OF  VBNIOE  AND  GENOA.       157 

enters  into  men's  thoughts.  As  muoh  as  paper-money  is  less 
material  than  coin,  by  so  much  is  money  of  account  less  material 
than  paper-money.  As  we  have  compared  coined  money  in  its 
efficiency  and  utility  to  a  carriage  drawn  by  horses,  and  paper- 
money  to  the  car  moved  by  steam-power,  so  might  wo  conceive 
of  money  of  account  as  a  vehicle  of  transportation  throup^h  the 
air,  moving  with  electric  swiftness,  and  impelled  by  some  of 
those  subtler  physical  forces  whose  mastery  is  yet  to  be  achieved. 
It  is  the  money  of  civilization  j  its  use  involves  a  degree  of 
intelligent  insight  into  the  true  nature  of  wealth  and  of  ex- 
changes, and  a  strong  confidence  in  the  general  honesty  and 
trustworthiness  of  mankind,  that  are  impossible  to  the  savage  or 
the  half-civilized  man. 

Money  of  account  originated  in  the  commercial  cities  of  Italy, 
and  its  use  was  thence  transferred  to  the  great  emporiums  of 
Northern  Europe — Amsterdam,  Hamburg  and  Stockholm.  The 
republics  of  Venice  and  of  Genoa  authorized  their  creditors  to 
establish  banks  on  the  basis  of  the  certificates  of  the  city's  debt. 
The  Bank  of  Venice  dates  from  1171,  when  a  forced  loan  was 
raised  to  fit  out  a  fleet  j  that  the  burden  might  be  felt  as  little 
as  possible,  the  persons  assessed  were  formed  into  a  company  for 
protection  of  their  common  concern  and  the  receipt  of  interest; 
at  the  same  time  the  debt  was  made  easily  transferable  by  order 
on  the  company,  and  thus  its  use  for  the  discharge  of  obligations 
grew  up  naturally.  At  first  it  was  a  forced  loan  under  special 
guarantees  ;  then  a  desirable  investment ;  then  a  means  of  pay- 
ment. The  first  character  of  the  deposits  so  entirely  disappeared 
that  government  ceased  to  pay  interest  on  the  capital.  Then  to 
secure  a  uniform  currency,  it  decreed  that  all  wholesale  transac- 
tions should  be  paid  in  the  form  of  a  transfer  of  bank  stock, 
unless  otherwise  stipulated ;  so  that  whoever  had  a  box  full  of 
coins,  gathered  from  the  four  quarters  of  the  earth  through  the 
manifold  channels  of  Venetian  trade,  took  them  to  the  bank  to 
get  credit  upon  its  books  according  to  their  weight  and  fineness. 
The  standard  by  which  their  value  was  estimated  was  called 
"  money  of  account/^  to  distinguish  it  from  the  various  moneyfa 


158  ELEMENTS    OF    POLITICAL    ECONOMY. 

that  were  translated  into  it.  The  government  treated  these 
masses  of  coin  as  payment  for  the  privilege  of  a  credit  on  the 
bank's  book,  and  all  idea  of  their  repayment  was  lost  sight  of. 
Yet  for  four  hundred  years,  or  until  the  conquest  of  the  city  by 
Napoleon  I.,  this  money  of  account  circulated  freely,  and  was 
at  a  premium  (or  agio)  in  coin ;  trade  proceeded  with  a  rapidity 
previously  unknown ;  no  Venetian  ever  raised  his  voice  in  com- 
plaint of  an  institution  which  was  the  pride  of  the  city  and  the 
envy  of  Europe.  When  the  French  destroyed  it,  they  found  no 
funds  to  reward  them. 

The  Bank  of  Genoa  originated  in  the  same  way,  but  differed 
in  some  details  of  management,  such  as  the  issue  of  bank-notes. 
The  Bank  of  Stockholm  owed  its  origin  to  the  fact  that  copper 
was  the  only  coin  in  circulation  in  Sweden,  and  it  was  therefore 
necessary  to  translate  this  into  a  more  convenient  form  of  money. 
Hamburg  and  Amsterdam,  the  Genoa  and  Venice  of  the  North 
in  th«  sixteenth  century,  were  equally  embarrassed  by  the  various 
weights  and  standards  of  the  coin  that  flowed  into  their  cities, 
and  established  banks  of  deposit  and  transfer  to  translate  these 
into  "  money  of  account;"  here  also  wholesale  transactions  were 
required  to  be  settled  in  the  shape  of  transfer  of  bank  credits. 
As  neither  were  based  on  government  debts,  and  neither  loaned 
money,  the  expenses  were  defrayed  by  a  slight  charge  to  the 
customers  of  the  bank.  Both  cities  reaped  immense  advantages 
from  the  system,  in  the  rapidity  and  ease  with  which  money  of 
account  passed  from  one  person  to  another  in  effecting  ex- 
changes. The  Bank  of  Amsterdam  failed  in  1790,  as  it  was 
found  that  the  funds  on  which  its  credit  rested  had  been  in  part 
abstracted  by  the  Dutch  government.  That  of  Hamburg  still 
exists. 

§  154.  A  bank  in  the  modern  sense  is  more  than  any  of 
these  institutions  was.  It  is  a  discount  house,  a  firm  for  the 
issue  of  paper -money,  a  place  for  deposit  of  money,  a  clearing- 
house^ and  a  branch  of  a  larger  clearing-house.  It  is  the  union 
of  all  the  earlier  features  of  such  institutions,  with  the  addition 
of  others  that  grew  out  of  the  peculiar  methods  of  modern 
business. 


FOUR   FUNCTIONS   OF   A    BANK.  150 

First,  its  discount  business.  A  bank  is  an  institution  that 
deals  in  credits  by  buying  up  debts, — that  may  be  said  to  turn 
debts  into  credits  for  a  consideration  called  discount.  Except  in 
the  retail  trade,  the  larger  part  of  modern  business  is  transacteci 
by  means  of  "  mercantile  paper."  The  buyer  docs  not  transfer 
the  amount  due  to  the  seller  in  coin  or  bank-notes.  He  gives  him 
a  bill  for  the  amount  payable  in  (say)  sixty  or  ninety  days. 
The  seller  cannot  afford  to  do  without  the  money  for  so  long  a 
time.  He  wants  to  "  turn  over  his  capital  "  as  fiist  as  possible; 
he  would  rather  give  up  a  percentage  of  his  profits  and  get  the 
.  money  at  ance.  He  takes  it  to  bank  to  be  discounted,  after 
making  himself  responsible  for  its  payment  by  endorsing  it. 
If  the  directors  are  satisfied  with  the  name  of  the  endorser  or 
of  the  drawer,  or  of  both,  they  let  him  have  the  money,  minus 
the  interest  for  the  time  specified.  When  the  time  is  up  the 
drawer  of  the  bill  must  pay  it,  or  if  he  fail  its  endorser  must. 

Second,  its  issue  business.  A  whole  or  a  part  of  the  money 
advanced  to  the  bank's  customer  may  be  needed  in  such  shape 
as  will  circulate  among  all  classes.  If  he  be  a  contractor  or  a 
manufacturer  he  is  dealing  with  people  who  keep  no  bank  ac- 
count. He  must,  therefore,  have  moneywhichthey  can  usc,and 
this  the  bank  gives  him,  either  in  its  own  notes,  or  in  those  of 
some  other  bank.  In  this  way  the  banks  put  into  circulation  a 
much  larger  sum  in  notes  than  their  whole  paid-up  capital  would 
suffice  to  redeem,  and  this  with  perfect  safety  to  themselves 
and  great  benefit  to  the  community. 

Third,  its  business  as  a  clearing -house  ^  which  is  the  most 
important  of  its  functions.  In  most  cases  a  customer  of  the 
bank  who  has  had  a  note  discounted  would  find  it  very  incon- 
Tenient  to  be  paid  in  any  form  of  money ;  he  prefers  a  credit 
to  that  amount  on  the  books  of  the  bank.  That  is,  the  bank 
advances  him  a  sum  of  money,  and  he  at  once  "  deposits "  it 
with  the  bank,  and  uses  the  credit  thus  obtained  to  pay  his 
debts  by  check,  i.  e.,  by  the  transfer  of  a  portion  of  this  credit 
to  the  account  of  his  creditors.  A  small  percentage  of  checks 
are  drawn  in  money  by  their  holders,  but  in  most  cases  they 


160  ELEMENTS   OF   POLITICAL   ECONOMY. 

are  paid  simply  by  a  transfer  of  credits.  In  this  case  the 
"  deposits "  on  the  bank's  books  become  virtually  part  of  the 
currency,  and  constitute  a  vast  fund  of  "money  of  account" 
for  the  discharge  of  indebtedness.  These  deposits  far  exceed  in 
amount  all  other  forms  of  money  in  circulation,  and  move  with 
greater  rapidity  and  exhibit  vaster  utility  in  effecting  exchanges. 
The  deposit  fund  continually  tends,  indeed,  to  diminish  in  volume 
through  the  discounted  notes  maturing  and  being  paid,  as  well 
as  through  the  payment  of  depositors'  checks ;  and  it  is  only 
kept  up  through  fresh  deposits  of  cash  or  fresh  discounts.  When 
the  demand  for  these  discounts  is  not  great,  or  the  directors  are 
hopeful  and  confident,  the  rate  of  discount  falls.  When  the  con- 
trary is  the  case,  it  rises  and  the  best  security  is  required. 

This  is  particularly  noticeable  in  countries  where  there  is  no  legal  limit 
to  the  rate  of  interest,  such  as  England.  In  the  United  States  a  bank 
usually  charges  uniformly  the  rate  fixed  by  law. 

Fourth,  to  make  the  system  more  efl&cient  and  to  give  this 
money  of  account  yet  wider  currency,  each  bank  in  our  great 
cities  is  a  branch  of  a  larger  clearing-house.  When  all  the 
business  of  a  city  was  done  at  a  single  bank,  the  transfer  of  its 
credits  sufficed  for  all  wholesale  transactions.  When  several 
took  the  place  of  one,  very  large  suras  of  money  passed  between 
them,  as  a  check  would  not  transfer  credit  unless  both  parties 
kept  accounts  at  the  same  bank.  But  now  each  bank  makes  its 
statement  in  the  clearing-house,  of  its  claims  against  every  other, 
and  on  balancing  the  account  of  each,  the  net  indebtedness  to 
(or  from)  it  is  ascertained,  and  paid  from  (or  to)  the  clearing- 
house. These  balances  are  the  merest  fraction  of  the  gross 
amounts,  and  the  system  brings  every  bank,  to  a  certain  extent, 
under  the  supervision  of  the  rest. 

This  method  of  settlement  was  adopted  by  the  dealers  in  the  old 
French  fairs,  and  enabled  the  merchants  to  transact  a  great  deal  of 
business  with  the  exchange  of  very  little  money. 

The  Scotch  banks  first  adopted  it  for  the  mutual  supervision  and  con- 
trol of  their  circulation.  They  met  once  a  fortnight  in  Edinburgh  to  ex- 
change notes,  and  paid  the  net  balances  in  coin. 


CAUSE  AND  CHARACTER  OF  PANICS.       161 

§  155.  Note  here  that  we  must  distinguish  between  the  true 
character  of  money  of  account  and  the  way  in  which  it  is  mostly 
created  in  modern  times.  The  method  of  buying  and  selling 
"  on  time  "  with  which  it  is  now  associated  is  open  to  many  ob- 
jections; but  if  that  method  were  utterly  abolished,  if  the  dis- 
count system  were  to  cease,  and  all  purchases  were  to  be  paid  in 
cash,  such  a  currency  as  this  would  be  as  necessary  as  cv€fi'  for 
the  transaction  of  business.  The  credit-fund  would  then  have 
to  be  created  entirely,  as  it  now  is  in  part,  by  the  actual  deposit 
of  money  in  some  institution  like  the  Bank  of  Hamburg.  Its 
volume  would  then  be  no  longer  liable  to  contraction  or  ex- 
pansion with  the  hopefulness  or  distrust  of  bank  directors. 
Were  a  money  of  account  based  not  on  deposits  of  cash,  but 
on  deposits  of  securities  to  a  fixed  amount,  as  in  Venice,  it  would 
retain  its  power  of  circulation,  with  no  reduction  of  its  volume, 
in  the  worst  seasons  of  panic,  and  would  be  continually  available 
for  the  transaction  of  legitimate  business.  The  possession  of 
such  a  ''money  of  account"  was  the  secret  of  the  mercantile 
stability  of  Venice  and  Genoa,  Hamburg  and  Amsterdam ;  as 
the  complication  of  our  "  money  of  account"  with  the  discount 
system  is  a  chief  cause  of  our  commercial  fluctuations. 

§  156.  No  market  is  so  sensitive  as  the  money  market.  A 
very  slight  reduction  in  the  supply  raises  the  price  out  of  all 
proportion,  and  leads  to  a  rigid  scrutiny  of  all  securities  offered 
as  the  ground  of  a  loan.  The  banks  at  such  a  period  are  sensi- 
tive to  the  approaching  stringency ;  they  refuse  discounts  that 
they  would  else  have  granted;  they  refuse  new  paper,  and  put 
an  artificial  dam  across  the  great  stream  of  credit-payments,  to 
the  ruin  of  those  who  must  go  on  and  who  must  have  money. 
In  the  fright  that  follows,  as  in  all  frights,  men  lose  their  wits ; 
the  business  community  is  demoralized.  Credit,  faith  in  any- 
body, in  anything  but  visible  and  tangible  money,  disappears. 
There  is  a  general  falling  back  upon  the  more  primitive  and 
material  methods  of  payment.  The  great  credit-fund  of  money 
of  account  loses  its  currency,  or  hold  upon  public  confidence, 
because  created  by  discounts  and  bound  up  with  the  uncertain 
11 


162  ELEMENTS   OF   POLITICAL    ECONOMY. 

fortunes  of  the  discounting  banks.  Then  begins  a  *'  run  upon 
the  deposits."  Those  deposits  were  in  great  part  created  by 
credits  granted,  and  were  never  intended  to  be  paid  in  money 
of  any  sort.  The  banks  sho'.ld  have  the  option  of  paying 
them  in  legal  tender,  or  in  «-ertificates  of  deposit,  good  at  the 
clearing-house;  but  they  have  -none.  They  are  demanded 
in  visible  and  current  money.  In  spite  of  the  reduction  of  dis- 
counts, their  amount  is  still  too  great  to  be  thus  disposed  of, 
and  a  suspension  of  the  banks  necessarily  follows,  upon  which 
the  panic  reaches  its  height.  All  exchange  of  services,  except 
the  most  necessary,  ceases  at  once ;  the  community  relapses  into 
the  barbarism  of  mutual  distrust.  The  history  of  banking, 
since  the  establishment  of  the  discount  system,  shows  us  tho 
necessity  of  such  a  reform  as  will  sunder  that  system  from  bank- 
ing proper,  and  secure  the  permanent  currency  and  the  free  crea- 
tion (under  proper  safeguards)  of  money  of  account. 

No  bank  existed  in  England  till  1694.  During  Common- 
wealth times  the  London  goldsmiths,  whose  fire-proof  and  thief< 
proof  vaults  rendered  them  the  natural  custodians  of  large  sums 
of  money,  began  to  exercise  some  of  the  functions  of  modern 
banking.  They  granted  loans  at  high  rates  of  interest,  and  is- 
sued these  in  demand-notes.  A  little  experience  showed  them 
how  much  specie  they  must  keep  on  hand  to  meet  the  possible 
demand  for  it  on  any  one  day.  They  paid  depositors  six  per 
cent,  interest  for  it.     This  continued  till  after  the  Revolution. 

§  157.  It  occurred  to  William  Paterson,  member  of  the  Scotch 
Parliament  from  Dumfries,  that  government  could  raise  money 
for  the  war  against  France  without  paying  the  high  rate  of  in- 
terest exacted  by  the  goldsmiths.  He  saw  that  a  far  larger  sum 
than  they  could  command  would  be  obtained,  if  the  government 
could  give  confidence  to  the  multitudes  who  were  hoarding  small 
bums,  and  make  it  worth  their  while  to  lend  them.  He  pro- 
posed a  Bank  of  England,  after  the  model  of  those  of  Italy  and 
Holland, — i.  e.,  for  the  issue  of  circulating  paper-money,  secured 
by  the  deposit  of  what  we  call  government  securities.  After 
much  opposition,  the  plan  was  adopted  with  some  modifications. 


THE   BANK   OF   ENGLAND.  163 

and  the  Bank  of  England  began  its  career  January  1st  1694 
by  lending  its  whole  paid-up  capital  of  £1,200,000  to  the  gov- 
ernment at  8  per  cent,  interest.  At  first  its  notes  were  gladly 
taken  in  exchange  for  the  light  and  defective  silver  currency  of 
that  day ;  but  when  the  new  coinage  that  was  carried  through 
under  Sir  Isaac  Newton  came  upon  the  market,  the  notes  de- 
clined in  favor,  although  they  bore  interest  and  were  much 
needed  for  the  business  of  the  country.  In  1G96  their  redemp- 
tion in  specie  was  suspended.  The  Tory  party,  mostly  country 
gentlemen,  attempted  to  establish  a  land-bank  as  a  rival.  It 
also  was  to  loan  money  to  the  government  and  to  discount  bills 
only  on  the  credit  of  real  estate.  The  plan  failed  utterly  and 
caused  great  loss  to  the  nation. 

The  Bank  of  England  grew  slowly  into  favor,and  lost  its  bit- 
terest enemies  as  the  old  race  of  usurers  died  out  and  none  filled 
their  places.  It  gradually  perfected  its  methods;  it  established 
the  system  of  book  credits,  with  payments  by  check.  It  substitu- 
ted demand-notes  bearing  no  interest  for  time-notes  that  bore 
interest;  these  new  notes  passed  quickly  into  the  circulation,  and 
were  rarely  returned  for  redemption.  It  issued  smaller  and 
therefore  more  useful  notes,  the  first  being  never  less  than  £20. 
It  secured  in  1706  a  virtual  monopoly,  not  more  than  six  per- 
sons being  allowed  to  unite  their  capital  to  establish  any  other 
bank  in  England.  (This  lasted  120  years,  and  was  then  confined 
to  London  and  towns  within  65  miles  of  it.)  On  the  other 
hand  it  upheld  the  public  credit,  and  greatly  simplified  ques- 
tions of  finance,  by  furnishing  a  channel  through  which  the 
people  could  easily  come  to  the  support  of  the  government  in 
time  of  need,  and  could  always  obtain  either  a  profitable  invest- 
ment for  capital  or  a  loan  of  money  on  easy  terms.  The  rate  of 
discount  down  to  1844  varied  between  4  and  5  per  cent., 
save  a  rise  to  5J  and  6  in  the  last  half  of  1839.  Other  bank- 
ing hou."5cs  grew  up  in  London  and  throughout  the  country,  but 
all  subordinate  to  the  great  national  concern  in  London. 

§  158.    As  a  state  bank  it  shared  in  the  vieissitudes  of  the 
government.     It  had  to  stand  a  run  on  its  specie  in  1745,  when 


164  ELEMENTS   OF   POLITICAL   ECONOMY. 

the  Pretender  was  on  Ms  way  to  London,  but  the  city  merchants 
stopped  this  by  publicly  pledging  themselves  to  stand  by  the 
bank.  In  1772  and  1783  panics  were  caused  by  "  over-trad- 
ing" in  foreign  goods;  in  the  latter  the  bank  for  the  first  time 
adopted  the  policy  of  cutting  down  its  discounts,  till  the  drain  of 
specie  from  the  country  should  cease, — an  effectual  but  rather 
''  heroic  "  remedy,  as  every  reduction  of  the  circulation  intensi- 
fies the  panic. 

In  1793  and  1797  panics  recurred;  that  of  1793  caused  partly 
by  over-trading,  partly  by  the  political  disturbances  of  the  time; 
that  of  1797  entirely  by  the  latter.  In  both  cases  the  bank  made 
bad  worse,  by  refusing  discounts  and  thus  allowing  wealthy  and 
solvent  firms  to  go  down  unaided.  Happily  the  government  re- 
stored confidence  by  an  issue  of  exchequer  notes.  In  1810  the 
revolt  of  the  Spanish- American  colonies  led  to  immense  over- 
trading and  a  consequent  panic.  Cargoes  of  skates  had  been 
sent  to  cities  where  ice  and  snow  were  never  seen,  and  others 
had  received  Epsom  salts  enough  to  physic  their  entire  popula- 
tion once  a  week  for  fifty  years.  The  bank  having  suspended 
specie  payments  since  1797,  came  to  the  aid  of  solvent  firms 
with  large  amounts  of  notes,  and  the  government  ordered  an 
issue  of  £6,000,000  besides. 

§  159.  In  1815  the  bank  began  to  get  ready  for  a  resumption 
of  specie  payments  by  cutting  down  discounts  and  reducing  cir- 
culation. It  thus  reduced  the  currency  by  £12,000,000,  a  mere 
trifle  as  compared  with  the  money  value  of  the  nation's  pro- 
perty ;  but  the  whole  circulation  for  a  time  stopped  and  an  arti- 
ficial panic  was  produced.  In  1821  it  resumed  specie  payments, 
after -a  suspension  of  twenty-four  years,  thus  altering  at  once  and 
greatly  the  terms  of  all  contracts  made  in  the  interval  and  not 
yet  executed.  All  who  had  land,  labor  or  produce  to  sell,  or 
contracts  to  fill,  were  placed  at  great  disa,dvantage.  Creditors — 
i,  e.,  the  wealthy,  capital-holding  class — gained  greatly,  except 
where  their  debtors  were  absolutely  ruined.  Mills  stopped,  land 
fell  in  price,  labor  was  thrown  idle,  and  in  peace  men  suffered 
saore  than  the  calamities  of  war. 


peel's  bank  bill.  1(J5 

In  1825,  1837  and  1839  panics  similar  to  that  of  1793 
occurred — i.  e.,  they  were  caused  by  over-trading  and  intensified 
by  the  selfish  policy  of  the  bank.  In  1840  a  parliamentary 
commission  began  to  investigate  the  reasons  of  these  crises,  and 
iu  1844  Sir  Robert  Peel's  famous  *'  Bank  Act "  was  passed,  with 
a  view  to  prevent  their  recurrence.  Rejecting  the  opinion  of 
Adam  Smith — that  if  bank-notes  be  issued  only  on  the  discount 
of  merchantable  bills  of  undoubted  character,  and  founded  on  a 
real  transaction,  they  cannot  be  excessive, — English  financiers 
had  adopted  the  theory  of  over-issues  as  explaining  the  whole 
matter.  That  theory  grew  very  naturally  out  of  their  mechanical 
theory  of  the  effect  of  an  increased  supply  of  money  (§  146). 

§  160.  The  Act  of  1844  was  directed  to  the  regulation  of  the 
English  currency  through  the  Bank  of  England,  to  prevent  a 
fancied  "depreciation."  It  severed  the  banking  department 
proper  from  the  department  of  issues,  and  transferred  to  the 
latter  £14,000,000  in  government  obligations  as  security  for  bank- 
notes of  that  amount.  It  required  that,  if  the  note  circulation 
exceeded  that  sum,  the  bank  should  have  gold  in  its  vaults  equal 
to  the  excess.  At  the  same  time  it  provided  that  the  bank-note 
circulation  of  the  country  banks  should  be  limited  and  diminished, 
never  increased.  In  other  words,  it  made  the  amount  of  paper- 
money  in  circulation  in  England  dependent  upon  the  amount  of 
bullion  in  the  vaults  of  the  banks. 

The  measure  betrayed  a  total  want  of  apprehension  of  the  true 
nature  of  the  discount  and  deposit  system.  It  did  not  put  the 
vast  currency  created  by  the  bank's  advances  and  those  of  its 
rivals,  under  any  specific  limitations.  It  allowed  the  bankers  to 
create  currency  ad  libitum  on  the  pages  of  their  ledgers,  pro- 
vided they  did  not  print  it  on  bits  of  silk  paper  that  passed  from 
hand  to  hand.  In  ordinary  business  times  it  could  therefore  put 
no  restraint  upon  the  real  circulation  of  the  country.  Rather  it 
set  before  the  bank  the  strongest  inducement  to  multiply  that 
currency  and  stimulate  speculation  when  money  was  easy,  that 
it  might  <'  make  hay  while  the  sun  shone "  and  get  its  super- 
fluous issues  into  circulation.     Heretofore  the  rate  of  discount 


166  ELEMENTS   OF   POLITICAL   ECONOMY. 

had  ranged  between  4  and  5 ;  from  this  date  the  extremes  are 
2  and  10.  The  office  of  a  regulator  is  to  moderate  extremes ; 
but  the  bank  has  really  intensified  and  exaggerated  them. 
And  when  we  speak  of  the  Bank  of  England,  it  must  be  re- 
membered that  it  controls  all  the  lesser  banks.  By  its  im- 
mense size,  its  vast  prestige,  its  special  privileges,  it  is  able  to 
fix  the  rate  to  be  paid  for  money  throughout  the  kingdom. 

But  in  other  than  ordinary  times,  when  this  great  credit-fund 
loses  its  currency,  when  the  business  community  is  demoralized 
by  panic,  and  the  demand  for  other  and  more  tangible  forms  of 
money  recurs,  the  act  becomes  at  once  powerful  for  mischief.  In 
such  a  case  the  actual  supply  of  notes  and  specie  is  manifestly 
unequal  to  the  vast  demand  made  upon  it  by  the  business  of  a 
great  nation ;  and  not  only  the  Bank  of  England,  but  all  the 
banks  of  the  country  are  hand-tied  so  far  as  regards  any  help 
they  can  give.  Their  notes  may  be  as  good  as  gold.  Since 
1823  they  have  always  been  so.  But  they  can  issue  none  until 
the  government  step  in  and  put  an  end  to  the  panic  by  sus- 
pending the  act  which  was  meant  to  prevent  panics. 

All  these  objections  were  very  ably  presented  before  the  act  was  passed, 
by  Lord  Ashburton  (head  of  the  house  of  Baring  Bros.),  T.  Tooke, 
(author  of  the  History  of  Prices),  John  Fullarton  ( On  the  Regulation  of 
the  Currency),  Charles  Scott  (a  Montreal  banker),  and  others ;  but  to  no 
purpose.  The  "  sound  views  on  currency  "  represented  by  Peel,  Lord 
Overstone  (Mr.  Jones  Lloyd),  Torrens,  McCuUoch,  &e.,  carried  the  day. 

Worse  still,  the  act  conduces  to  purely  artificial  panics.  The 
causes  that  lead  to  the  diminution  of  bullion  in  the  bank  vaults 
are  various,  and  most,  or  indeed  all  of  them,  are  without  any  signi- 
ficance as  to  the  general  soundness  of  the  English  money  market. 
If  a  large  amount  of  foreign  stocks  or  government  bonds  have 
been  subscribed  for,  gold  must  go  out  to  pay  for  them.  If 
schemes  of  improvement  in  India  are  on  foot,  English  gold  must 
buy  on  the  Continent  the  silver  that  is  to  pay  the  Hindoo  work- 
men. If  any  country  has  sold  as  much  as  usual  to  England,  but 
has  bought  less  than  usual,  specie  must  be  exported  to  pay  the 
balance,  since  bills  of  exchange  are  not  to  be  had.     If  a  failure 


"putting  on  the  bank  screw.'"  107 

of  the  Euglish  grain  crop  necessitates  a  larger  import  than  usual 
of  Russian  or  American  wheat,  Mark  Lane  must  pay  for  it  partly 
in  gold,  unless  the  exports  to  Russia  or  America  be  unusually 
great.  Any  one  of  these  causes  or  a  concurrence  of  several  will 
diminish  the  bullion  in  bank.  Were  there  no  Act  of  1844,  and 
were  the  directors  wise  by  past  experience,  the  decrease  would 
not  matter.  It  might  be  treated  as  a  petty  backset,  that  the 
course  of  trade  would  speedily  compensate  for. 

But  as  ii  is,  the  bank  raises  the  rate  and  diminishes  the 
amount  of  discounts  as  the  bullion  diminishes,  in  order  to  keep 
the  circulation  down  to  the  level  of  the  bullion,  instead  of 
taking  any  steps  directly  to  replace  the  loss.  It  does  not  go  to 
the  Continent  to  buy  or  borrow  bullion ;  it  throws  the  whole 
pressure,  of  the  distress  upon  the  business  men  of  the  nation. 
Holders  of  stocks  of  domestic  and  even  of  foreign  goods,  who 
are  in  want  of  money,  must  throw  them  on  the  market  at  any  sacri- 
fice, and  sell  them  at  a  bargain  to  some  rich  capitalist  at  home  or  on 
the  Continent  who  is  on  the  outlook  for  such  chances.  English 
stocks  and  foreign  stocks  held  in  England  are  sometimes  sacrificed 
to  an  extent  that  exceeds  the  maximum  of  bullion  in  the  bank 
vaults.  In  this  way  a  purely  artificial  drain  of  specie  home- 
ward is  produced,  and  the  bank  is  satisfied.  In  the  meantime 
great  establishments  have  broken  down  under  the  pressure,  a 
few  because  they  ought  to  break,  others  in  spite  of  their  com- 
plete solvency.  In  many  cases,  after  the  affairs  of  such  houses 
have  been  wound  up  by  the  costly  processes  of  an  English 
bankruptcy, — which  absorbs  45  per  cent,  of  the  estate, — every 
creditor  has  been  paid  in  full,  and  a  handsome  fortune  lefl  to 
the  partners. 

§  16L  Three  years  after  Peel's  Bank  Act  was  passed  came 
the  crisis  of  1847,  occasioned  partly  by  the  drain  of  gold  to 
buy  food  abroad  because  of  the  failure  of  the  potato  crop,  partly 
by  the  great  railway  speculations  of  that  period.  The  Bank  Act 
failed  in  its  purpose,  as  even  its  author  confessed ;  the  govern- 
ment suspended  its  operations  to  allow  the  bank  to  come  to  the 
assistance  of  business  men.     The  same  took  place  in  the  great 


168  'elements  of  political  economy. 

crises  of  1857  and  1866,  and  in  a  less  degree  in  1874.  Ii? 
1857  mercantile  extravagance  was  not  rife  in  England  ;  business 
was  quiet  and  moderate  as  compared  with  1852,  when  the  bank 
stimulated  speculation  to  the  utmost  by  lowering  the  rate  to 
two  per  cent.  But  Peel's  Act  necessitates  a  crisis  in  England 
whenever  any  of  England's  customers  are  in  trouble.  The 
American  crisis  caused  a  drain  of  specie  from  Europe  to  the 
United  States,  and  all  England  was  put  "  under  the  bankV 
screw  "  to  turn  the  tide  of  gold  back  to  England ;  prices  were 
forced  down  twenty-five  per  cent.,  and  large  amounts  of  the  pro- 
ducts of  industry  passed  out  of  the  hands  of  their  rightful  owners 
into  those  of  capitalists  who  could  take  advantage  of  their  ne- 
cessities. Every  crisis  takes  from  the  poorer  and  more  active  to 
give  to  the  richer  and  idler  classes,  and  adds  to  the  inequality 
of  wealth  that  is  so  ominous  a  sign  for  the  future  of  England. 
It  destroys  also  a  part  of  the  moral  capital  of  the  nation, — the 
confidence  and  hopefulness  of  its  captains  of  industry. 

England  possesses,  therefore,  a  highly  artificial  banking  system, 
one  which  is  nominally  armed  with  great  powers  to  protect  the 
industrial  interests  of  the  nation,  but  certain,  if  rigidly  ad- 
hered to.  to  use  them  to  oppress  and  injure  those  interests. 

§  162,  In  Scotland,  on  the  other  hand,  we  find  an  eminently 
natural  banking  system,  created  not /or  the  people,  but  hi/them^ 
acting  down  to  1845  with  the  most  perfect  freedom  in  the  exten- 
sion of  its  operations,  the  increase  of  its  credits  and  the  amount 
of  its  circulation.  And  the  safety  has  been  exactly  proportional 
to  the  freedom.  Scottish  bank-notes  have  been  at  par;  the 
people  will  take  guineas  instead,  if  they  must,  but  they  pass 
them  ofi^  as  soon  as  possible  as  a  pretentious,  unthrifty,  eminently 
un-Scottish  kind  of  money,  much  inferior  to  a  native  bank-note 
issued  in  any  corner  of  Scotland. 

The  business  men  of  Edinburgh,  having  heard  that  their  coun- 
tryman (Paterson)  was  planning  a  bank  for  the  English,  and 
that  he  had  been  successful  in  obtaining  a  hearing,  asked  an 
Englishman  named  Holland  to  devise  a  Bank  of  Scotland.  He 
did  so,  and  put  his  proposals  before  them.     They  knew  nothing 


THE  SCOTCH   METHOD   OP   BANKING.  1G9 

of  banking,  but  were  willing  to  learn.  They  abounded  in  objec- 
tions, but  saw  the  point  of  his  answers.  And  so,  in  1095,  the 
new  institution  was  launched,  under  a  charter  granted  by  the 
Scottish  Parliament,  being  the  first  private  joint-stock  bank  that 
the  world  had  ever  seen.  It  had  a  monopoly  for  twcnty-ono 
years;  its  profits  were  very  large,  and  the  benefits  that  it 
conferred  on  an  impoverished  country  were  immense.  Other 
companies  came  into  existence,  and  the  jealousies  were  extreme  ; 
every  bank  was  eager  to  break  the  rest,  or  at  least  injure  their 
credit.  In  1752  better  counsels  prevailed.  Legislation  was  had 
to  put  an  end  to  some  abuses,  including  the  practice  of  refusing 
payment  of  notes  till  six  months  after  demand,  and  the  issue  of 
very  small  currency.  The  banks  associated  closely  in  a  sort  of 
national  clearing-house,  for  mutual  protection  and  mutual  sur- 
veillance. The  bi-weekly  exchange  of  claims  in  Edinburgh  was 
adopted,  serving  as  a  powerful  check  upon  unsafe  business.  No- 
where in  the  world  has  an  extensive  banking  system  been  carried 
on  with  so  little  loss  to  the  public,  and  no  country  has  derived 
so  much  benefit  from  banking. 

The  distinguishing  feature  of  the  Scottish  banks  is  their 
system  of  cash  credits.  Whoever  can  get  two  satisfactory 
bailsmen  to  endorse  his  bond,  can  open  an  account  for  its  amount 
in  the  bank.  He  is  charged  four  per  cent,  on  the  amount  that 
he  actually  draws,  and  is  allowed  two  per  cent,  on  sums  deposited 
when  the  bank  is  in  his  debt;  that  is,  after  every  day's  transac- 
tions his  account  is  balanced  and  he  is  paid  interest  at  the  lower 
rate  or  pays  it  at  the  higher  rate, — according  as  he  is  the  bank's 
creditor  or  its  debtor — till  the  next  transaction  alters  the  balance. 
But  the  payments  are  mostly  in  notes,  and  not  by  check ;  paper 
money,  therefore,  plays  a  large  part  in  Scotch  banking,  as  notes 
constitute  almost  the  entire  currency  of  the  kingdom.  They  are 
not  aristocratic  notes  like  those  of  England,  of  £5  and  upward, 
but  very  largely  £1  notes  for  the  use  of  the  people.  It  is  to 
exchange  these  notes  and  pay  their  balances  in  coin  that  the 
banks  meet  twice  a  week,  and  thus  they  are  enabled  to  form  an 
estimate  of  the  extent  and  safety  of  the  business  of  each.     In 


170  ELEMENTS    OF    POLITICAL    ECONOMY. 

1826  the  English  ministry  proposed,  "  for  the  sake  of  uniformity/ 
to  abolish  this  useful  and  popular  currency;  but  the  proposal  was 
received  with  such  an  outburst  of  opposition  from  all  classes  and 
parties  (Sir  Walter  Scott  took  a  very  prominent  part),  that  it  was 
abandoned.  In  1845  all  further  increase  in  the  amount  of  this 
paper-money  was  forbidden — i.  e.,  it  was  enacted  that,  however 
great  Scotland's  need  for  more  money  in  the  course  of  her  growth, 
she  should  have  no  more.  She  has  now  actually  less,  as  the  failure 
of  a  Glasgow  bank  has  caused  the  lapse  of  several  hundred  thou- 
sand pounds.  In  times  of  panic  these  cautious  Scotchmen 
exercise  the  higher  caution  of  mutual  help.  In  the  run  on  the 
Union  Bank  of  Edinburgh  in  1857,  there  was  in  Bank  street  a 
double  flow  of  gold — frightened  depositors  carrying  away  their 
money  to  other  banks,  and  bank  clerks  carrying  it  back  again. 
The  results  fully  justify  this  confidence;  for  over  a  century  the 
public  have  lost  nothing  by  the  banks  and  the  banks  have  lost 
nothing  by  the  public.  Stockholders  have  lost  in  a  very  few 
instances  through  dishonest  or  silly  management. 

§  163.  The  first  Bank  of  France  was  established  in  1716, 
when  the  country  was  bankrupt,  business  suspended,  and  the 
misery  of  the  people  at  its  height.  In  two  years  it  had  revived 
trade  of  every  kind  and  restored  the  public  credit.  Unfortu- 
nately its  projector  and  manager,  a  Scotchman  named  John  Law, 
held  the  theory  that  a  country  could  not  have  too  much  money, 
and  that  it  could  safely  have  and  usefully  employ  as  much  as 
the  entire  value  of  its  property.  Sustained  in  his  schemes  by 
the  Regent,  he  extended  the  circulation  to  four  thousand  millions 
of  dollars,  bought  up  the  royal  revenues,  the  colonies  and  the 
entire  foreign  trade  of  France,  and  went  into  immense  specula- 
tions in  trade.  To  keep  up  the  value  of  his  notes,  false  divi- 
dends were  declared,  and  specie  was  forbidden  to  pass  as  money 
except  in  small  amounts.  Of  course  th^  attempt  utterly  failed, 
and  the  bubble  burst,  leaving  France  in  a  worse  plight  than 
before. 

In  1776  another  bank  was  started,  but  not  under  that  name, 
as  France  was  afraid  of  banks.     This  one  shared  in  the  great 


BANK  OF  FRANCE. — LAND  BANKS.        171 

struggle  carried  on  by  Turgot  and  Necker,  to  redeem  the  public 
credit — and  in  the  failure  of  the  struggle.  It  came  to  an  end 
with  the  Revolution,  and  was  succeeded  by  a  joint-stock  bank, 
established  by  the  Parisian  bankers. 

The  present  Bank  of  France  was  founded  by  Napoleon  in 
1800 ;  it  was  given  a  complete  monopoly  of  banking — a  state  of 
things  that  has  been  again  restored  through  the  provincial  banks 
being  united  to  it.  Throughout  its  history  it  has  been  charac- 
terized by  public  spirit  and  a  generous  policy.  Thus  it  did  its 
utmost  to  carry  French  commerce  through  the  exciting  times 
of  1848  without  reducing  its  discounts  ;  and  when  the  govern- 
ment authorized  it  to  suspend  specie  payments,  it  really  never 
did  so.  It  has  repeatedly  raised  bullion  by  loan  or  purchase  to 
meet  a  drain,  instead  of  making  the  business  community  meet 
the  emergency  for  it.  Since  1857  it  has  adopted  the  principle 
of  raising  the  rate  of  discount  in  stormy  times,  but  apparently 
it  does  not  materially  decrease  the  amount.  For  this  reason  all 
sorts  of  disasters  are  predicted  for  it  by  English  authorities  on 
finance.  France  sufi'ers  less  from  commercial  crises  than  Eng- 
land or  America,  because  less  engaged  in  foreign  trade  or  indeed 
in  wholesale  operations  of  any  sort.  Her  currency  is  mainly 
specie,  and  the  extent  of  the  credit  system  in  proportion  to  her 
population  and  wealth  is  very  small. 

§  164.  In  France,  Belgium,  Germany  and  Russia,  the  pro- 
blem of  CvStablishing  banks  on  the  credit  of  real  estate  has  been 
successfully  solved,  and  these  banks  are  now  very  widely  estab- 
lished to  grant  discounts  to  landowners  and  thus  promote  agri- 
cultural improvement.  The  great  difficulty  and  expense  of 
proving  land-titles,  and  of  legally  recovering  money  loaned  on 
land,  seemed  to  condemn  this  class  to  pay  high  rates  of  interest. 
In  Scotland,  however,  there  is  a  very  simple  system  of  land- 
registry,  and  recovery  of  debts  is  a  cheap  and  easy  process. 
The  Scotch  banks,  by  their  cash  credits  secured  by  bond,  have 
solved  the  problem  for  their  agricultural  customers.  The  land- 
owners of  Silesia,  finding  themselves  utterly  impoverished  by 
the  wars  of  Frederick  the  Great,  adopted  a  scheme  proposed 


172  ELEMENTS   OF   POLITICAL   ECONOMY. 

to  them  by  a  Berlin  merchant,  named  Btiring.  They  unitedly 
pledged  the  whole  land  of  the  province  to  the  government, 
which  raised  money  on  its  own  credit  as  if  for  a  public  loan, 
and  lent  it  to  the  association  at  the  rate  it  paid  for  it.  This 
loan  is  put  on  the  market  in  the  form  of  land-stock,  guaranteed 
by  the  government  and  transferable  at  pleasure.  Besides  this 
public  association,  private  ones  have  been  formed  in  great 
numbers,  and  have  done  much  to  improve  the  agriculture  of  the 
Continent.  These  private  land-credit  banks  take  mortgages 
bearing  a  fixed  rate  of  interest  upon  landed  property,  paying  for 
those  mortgages  not  in  money,  but  in  their  own  obligations  bear- 
ing a  lower  rate  of  interest,  which  obligations  the  mortgagor 
sells,  mainly  to  small  local  capitalists. 

§  165.  Although  proposals  were  very  early  made  for  the 
establishment  of  joint-stock  banks  of  issue  in  the  American 
colonies  (especially  in  Boston  and  in  Philadelphia),  land  bank- 
ing was  the  first  that  was  adopted.  The  colonial  governments' 
land  offices  made  loans  in  paper-money  "  on  bond  and  mortgage  " 
at  low  rates  of  interest,  thus  furnishing  a  circulation  for  local 
trade  and  helping  the  settler  to  reclaim  his  land.  The  deprecia- 
tion of  public  credit  by  the  vast  issues  of  paper-money  during 
the  Revolutionary  War  put  an  end  to  the  practice.  But  these 
colonial  issues  did  not  stand  at  par;  they  ranked  difi'erently  in 
different  colonies,  and  so  gave  rise  to  that  curious  complication 
by  which  a  pound  meant  one  thing  on  the  right  bank  of  the 
Delaware,  another  on  the  left,  but  a  pound  sterling  in  neither  case. 

§  166.  Robert  Morris,  a  merchant  of  Philadelphia,  was  much 
struck  with  the  need  of  a  public  bank  to  facilitate  the  business 
of  the  colony,  and  was  about  to  ask  a  charter  for  one  when  the 
Revolution  put  a  stop  to  his  plans.  Being  the  Superintendent 
of  Finances  during  the  closing  years  of  the  war,  he  had  great 
difficulty  in  raising  loans,  and  proposed  to  the  Continental 
Congress  his  plan  for  a  bank.  It  was  formally  approved,  a 
charter  secured  fr\om  the  State  legislature,  and  the  Bank  of 
North  America  went  into  operation  January  1782.     The  national 

For  some  account  of  a  system  by  which  the  advantages  of  the  credit 
system  have  been  extended  even  to  the  working  classes,  see  ^  140. 


BANK   OF   THE    UNITED   STATES.  173 

government  took  a  quarter  of  a  million  in  stock,  and  borrowed 
5400,000  from  the  bank.  It  did  much  to  reston)  public  credit  and 
stimulate  industry ;  it  gradually  became  independent  of  govern- 
ment, while  still  rendering  needed  aid.  In  1785  its  charter  was 
withdrawn  by  the  state  legislature  by  the  vot«s  of  the  country 
members,  who  wished  to  see  the  state's  credit  restored  and  tho 
land  offices  reopened, — and  who  thought  the  bank  was  in  the 
way.  It  continued  operations  without  a  charter,  and  was  re- 
chartered  in  1787,  the  farmers  having  found  out  their  mistake. 

Banks  were  soon  after  established  in  Boston,  New  York  and 
Baltimore. 

§  167.  The  old  Bank  of  the  United  States  was  chartered  by 
the  U.  S.  Congress  in  1791,  on  the  recommendation  of  Alexander 
Hamilton,  whose  report  on  the  subject  is  a  masterly  state  paper. 
When  the  charter  had  expired  in  1811,  the  party  of  strict  con- 
struction— i.  e.,  those  who  believed  in  giving  the  general  govern- 
ment as  Httle  power  as  possible — were  in  possession  of  power 
and  refused  to  renew  the  charter.  The  local  banks  chartered  by 
the  states  alone  remained,  with  capital  by  no  means  equal  to  the 
demands  upon  them.  Great  expansions  were  followed  by  sudden 
contractions  of  the  currency,  the  banks  always  "protecting 
themselves "  at  the  expense  of  their  customers  by  sudden  re- 
trenchment of  circulation,  rather  than  sacrifice  any  part  of  the 
large  amount  of  government  stocks  that  they  held.  Well  might 
Matthew  Carey  protest,  ''  that  abstracted  from  all  attention  to 
the  interests  of  the  community,  it  is  supereminently  absurd, 
impolitic,  and  injurious,  as  it  regards  the  interests  merely  of  the 
banks,  to  press  citizens  into  the  vortex  of  bankruptcy;"  and 
*'  that  those  sudden  vibrations  of  bank  accommodation  whereby 
money  is  rendered  superabundant  at  one  time  and  immoderately 
scarce  at  another,  are  favorable  to  speculation  and  the  wealthy 
alone, — and  are  pernicious  to  morals,  industry,  trade  and  com- 
merce,— that  they  tend  to  enrich  the  wealthy  and  impoverish 
those  who  stand  in  the  middle  and  lower  walks  of  life, — in  a 
word,  to  make  the  rich  richer  and  the  poor  poorer." 

LetterH  to  the  Directors  of  the  Banks  of  Philaddj>hia  (1816). 


174  ELEMENTS   OF   POLITICAL   ECONOMY. 

§  168.  The  second  U.  S.  Bank  was  chartered  in  1816,  a 
charter  granted  two  years  previously  having  been  defeated  by 
the  veto  of  President  Madison.  Its  earlier  years  covered  a  period 
of  great  financial  prostration  (1816-24)  j  its  later  period  was 
one  of  great  inflation  and  general  speculation  (1833-6) ;  the 
nine  years  between  were  marked  by  a  sober  and  steady  growth 
in  all  the  elements  of  national  prosperity.  The  history  of  the 
bank  and  its  national  influence  has  been  the  subject  of  bitter 
and  protracted  controversy.  We  incline  to  the  view  that  it 
rendered  the  nation  great  services  in  helping  it  out  of  the  time 
of  distress,  and  was  in  no  wise  responsible  for  the  inflation  and 
reckless  trading  that  culminated  in  the  crisis  of  1837-8.  It 
furnished  a  national  currency  that  passed  current  in  every  part 
of  the  Union,  at  a  time  when  the  complexity  of  a  score  of 
diff"ereut  banking  systems,  and  the  existence  of  numbers  of 
fraudulent  banks,  prevented  the  notes  of  any  other  bank  from 
possessing  more  than  a  local  circulation.  It  raised  the  public 
credit  by  accepting  public  bonds  as  subscriptions  for  bank  stock. 
It  evinced  the  solidity  of  its  monetary  basis  by  sustaining  for 
years  the  attacks  of  a  powerful  political  faction,  headed  by 
President  Jackson,  When  at  last  it  failed  to  obtain  a  renewal  of 
its  charter,  and  thus  ceased  to  be  a  national  and  became  a  state 
bank,  it  was  at  the  same  time  greatly  weakened  both  in  actual 
resources  and  in  public  confidence  by  the  withdrawal  of  the 
government  deposits.  It  engaged  in  speculations,  and  the  failure 
of  these,  joined  to  the  hostility  of  the  then  dominant  political 
party,  involved  its  ruin,  but  it  cannot  be  held  to  have  verified 
the  prophecies  of  its  enemies. 

§  169.  From  1836  till  the  opening  years  of  the  recent  Civil 
War,  we  had  no  National  Banking  system.  Every  state  legis- 
lated according  to  its  light,  and  hardly  one  of  these  state  laws 
evinces  any  intimate  knowledge  of  the  workings  of  the  credit 
system.  Some  had  the  wisdom  to  leave  their  people  free  to  en- 
gage in  banking  to  any  extent  they  pleased,  under  general  re- 
strictions for  the  defence  of  the  public  who  held  bank-notes,- — 
as  in  Scotland.     Others  by  artificial  restrictions  kept  capital  out 


STATE   BANKING   LAWS.  175 

of  banking,  and  thus  prevented  the  business  community  from 
getting  the  amount  of  accommodation  they  needed.  Thus 
Rhode  Island,  under  a  free  system,  had  seventy-one  banks,  or 
one  for  every  2000  of  its  population,  with  an  aggregate  capital 
of  nearly  ^15,000,000,  and  investments  and  loans  of  319,500,000. 
Pennsylvania  in  1850,  under  a  restrictive  system,  had  but  fifty- 
three  banks,  or  one  to  every  40,000  of  its  people,  with  a  capital 
of  $20,500,000,  and  loans  and  investments  of  over  $50,000,000. 
Rhode  Island  had  $100  a  head  invested  in  banking;  Pennsyl- 
vania $8.  The  legislators  who  established  this  state  of  things, 
and  conferred  the  monopoly  of  banking  on  a  few  favored  estab- 
lishments, thought  they  had  provided  for  all  risks  by  limiting 
the  number  of  bank-notes,  and  requiring  the  banks  to  keep  a 
fair  proportion  of  specie  on  hand  for  their  redemption.  They 
did  not  see  that  they  had  left  it  in  the  power  of  the  directors  to 
create  another  species  of  currency  without  any  limit  except 
ordinary  prudence,  and  yielding  large  returns  for  the  loan  of 
the  bank's  credit.  If  they  saw  a  huge  mass  of  "  deposits  "  set 
over  against  a  somewhat  larger  mass  of  "  loans  and  investments  " 
in  the  published  reports,  they  probably  counted  it  a  sign  of  the 
high  confidence  that  the  bank  enjoyed  ;  they  never  thought  of 
those  deposits  as  a  far  more  volatile  and  explosive  form  of  cur- 
rency, not  issued  in  engraved  notes,  but  created  by  a  few  strokes 
of  the  pen  on  the  credit  side  of  a  bank-account.  By  limiting 
the  capital  invested,  they  had  only  furnished  the  chance  and 
increased  the  temptation  to  excessive  discounts,  such  as  the 
actual  figures  show.  Nay,  they  rather  forced  the  banks  to  go 
beyond  the  bounds  of  prudence  by  subjecting  them  to  an  intense 
pressure  on  the  part  of  the  business  community,  which  would 
otherwise  have  been  distributed  over  a  large  number  of  estab- 
lishments with  a  great  aggregate  capital.  For  the  profits  of  safe 
banking  are  always  large  enough  to  attract  thither  as  much 
capital  as  the  business  community  needs,  when  the  right  to 
establish  a  bank  is  restricted  only  by  such  general  laws  as  are 
necessary  to  protect  the  public. 

§  170.  The  banks  of  our  three  great  seaports  rendered  very 


176  ELEMENTS    OF   POLITICAL   ECONOMY. 

effective  service  to  the  government  during  the  opening  years  of 
the  war,  filling  the  empty  treasury  by  a  large  loan  of  specie,  and 
upholding  the  national  credit. 

The  National  Banking  system  which  has  grown  out  of  Secretary 
Chase's  financial  operations,  and  now  includes  all  the  banks  of 
issue  in  the  country,  recalls  many  of  the  features  of  early  banking. 
Like  the  Italian  banks,  and  the  Bank  of  England  in  its  first 
stage,  the  notes  are  secured  by  the  deposit  of  government  securi- 
ties, but  with  the  additional  guarantee  that  the  national  credit  ia 
fully  pledged  for  their  redemption.  The  banks  have  a  double 
source  of  profit;  they  receive  the  interest  on  the  government 
bonds,  and  have  besides  the  profits  of  their  discounts.  They  are 
of  course  subjected  to  the  closest  examination  as  to  the  state  and 
management  of  their  affairs.  Those  who  remember  the  state  of 
the  currency  before  the  war,  or  have  ever  looked  into  an  old 
Counterfeit  Detector^  will  be  forced  to  confess  that  this  national 
currency  has  great  advantages. 

The  valid  objections  to  the  system  are  two :  (1)  The  laws  to 
establish  and  regulate  it  are  based  upon  a  very  imperfect  notion 
of  the  credit  system,  and  of  the  nature  and  extent  of  the  credit 
employed  by  the  bank  in  business.  Like  the  old  state  laws, 
they  take  great  pains  to  "  hedge  in  the  cuckoo"  by  limiting  the 
issues  of  notes.  They  do  not  provide  for  the  grouping  of  the 
banks  in  local  clearing-houses  for  mutual  supervision.  They  do 
nothing  to  keep  the  banks  from  "  protecting  themselves  "  in 
stringent  times  at  the  cost  of  the  business  community  at  large. 

(2)  The  distribution  of  these  banks  was  an  artificial  one,  and 
was  becoming  more  and  more  so  with  every  year.  In  the  original 
assignment  the  amount  of  their  aggregate  issues  was  fixed  at 
a  given  amount  and  distributed  among  the  states  accord- 
ing to  population.  Several  of  the  poorer  states  were  unable  to 
make  use  at  once  of  all  the  amount  thus  assigned  to  them,  and 
after  a  given  date  it  was  distributed  among  the  older  and  richer 
states.  Connecticut,  Rhode  Island  and  Massachusetts,  for  in- 
stance, got  very  much  more  than  their  share,  the  Western  States 
very  much    less.     With   every  year   these   poorer  states  were 


DEFECTS   OF   OUR   BANKING    SYSTEM.  177 

growing  in  wealth  and  in  the  need  for  money,  at  a  rate  that  sur- 
passed the  progress  of  the  older  states.  With  every  year  the 
preponderance  of  numbers  and  wealth  shifted  farther  westward. 
But  the  new  states  were  tied  to  just  the  amount  of  circulation  that 
they  could  put  upon  the  market  at  that  date ;  and  this,  although 
they  needed  far  more  bank-notes  in  proportion  to  the  extent  of 
their  business  than  the  older  states  did,  as  with  them  the  credit 
system  is  far  less  perfectly  organized.  Hence  their  outcry  for 
more  money,  and  their  opposition  to  the  measures  taken  to  re- 
duce the  amount  of  national  currency  in  circulation,  unless  it 
were  replaced  by  some  other  form  of  paper-money.  So  far  as  this 
defect  can  be  obviated  without  changing  the  basis  of  our  bank- 
ing system,  it  has  been,  by  recent  legislation. 

(3)  In  spite  of  their  bearing  the  name  *'  national,"  our  banks 
are  confined  to  very  limited  localities  in  the  transaction  of  busi- 
ness. A  vast  amount  of  money  is  paid  in  transactions  between 
distant  parts  of  the  nation  by  the  cumbrous  and  expensive 
method  of  drawing  and  negotiating  bills  of  exchange.  The 
sales  of  the  Western  crops  and  the  purchase  of  Eastern  goods 
in  exchange  are  actually  carried  on  as  if  they  were  transactions 
between  the  merchants  of  two  different  nations,  and  sometimes  at 
an  expense  of  several  per  cent,  premium  or  discount  to  business 
men.  While  our  present  system  offers  the  advantage  that  the 
national  currency  passes  freely  through  the  whole  nation,  and 
keeps  the  rate  of  discount  down,  its  incompleteness  leaves 
great  openings  for  illegitimate  business  in  drawing  speculative 
bills  of  exchange  based  on  no  real  transaction,  but  negotiated  by 
collusion  between  distant  banks  or  firms. 

A  national  clearing-house  established  by  government,  with 
branches  in  every  important  city,  and  an  understanding  with  all 
the  national  banks,  would  cheapen,  simplify  and  add  security  to 
all  our  domestic  trade.  As  loc«il  clearinghouses  enable  the 
banks  to  keep  watch  upon  one  another,  so  would  this  system 
bring  the  collective  banks  of  each  locality  under  the  supervision 
of  the  banks  of  other  places.  The  amount  of  money  needed  for 
the  whole  business  of  the  nation  would  be  greatly  reduced.  The 
12 


178  ELEMENTS   OF    POLITICAL    ECONOMY. 

balance  due  to  (or  from)  any  city  from  (or  to)  all  the  rest,  could 
be  ascertained  at  a  central  office  and  then  paid  from  (or  to)  that 
office.  There  might  also  be  lodged  in  this  national  clearing-house, 
as  in  the  Bank  of  England,  '^  the  power  to  meet  panics  by  tempo- 
rary expansion/^  which  "  must  be  a  power  capable  of  being  used 
promptly  and  with  decision'^  (  The  Nation).  Of  course  this  in- 
stitution would  be  debarred  from  all  trading  in  money  or  com- 
modities, and  would  be  allowed  to  charge  a  small  pe?-  centum  or 
rather  per  mille  to  pay  expenses. 

(4)  The  laws  which  regulate  these  banks  unhappily  tend  to 
accelerate  rather  than  to  retard  the  centralizing  tendencies  of 
the  national  money-market, — the  tendency  to  gather  the  great 
mass  of  the  nation's  capital  into  one  great  monetary  centre. 
Money  flows  naturally  to  the  places  where  it  is  most  abundant, 
just  as  water  tends  to  run  down  hill;  but  as  it  is  often  the 
chief  problem  in  hydraulics  to  overcome  that  natural  law,  so 
also  is  it  a  chief  problem  of  national  economy  to  bring  the 
power  of  capital  to  bear  upon  the  less  developed  and  less 
wealthy  districts  of  the  country. 


CHAPTER  NINTH. 
National  Economy  of  Finance  and  Taxation. 

§  17L  The  diflfcrentiation  of  function  that  accompanies  the 
progress  of  society  renders  necessary  the  existence  of  a  body  of 
paid  ofiicials  to  carry  on  the  government  (including  police  and 
military  forces),  and  numerous  other  expenditures.  In  the  earli- 
est time  the  head  of  the  family — the  chief  of  the  tribe — the 
lord  of  the  manor — bore  rule  within  limited  areas  without  re- 
ceiving fee  or  salary.  He  was  the  lawgiver,  the  law-ward  (lord), 
the  executor  of  the  law,  by  reason  of  his  position  as  chief  pro- 
prietor or  as  head  of  the  kindred.  But  in  the  growth  of  nation- 
alities a  great  step  was  effected  when  the  king's  judges  rode 
circuit  through  the  whole  realm,  with  cognisance  of  all  or  nearly 
all  causes,  and  when  the  king's  shire-reeve  (sheriff)  took  the 
place  of  the  feudal  and  hereditary  count  at  the  head  of  the 
county.  It  was  felt  that  there  was  a  great  gain  in  the  increased 
responsibility  and  in  the  fairness  of  professional  judges,  though 
the  new  system  was  far  more  expensive.  The  remnants  of  the 
old  system  that  exist  to  this  day  in  England  in  the  unpaid  jus- 
tices of  the  peace,  chosen  from  the  gentry  and  clergy,  is  felt  by 
the  common  people  to  be  a  great  burden.  It  gives  the  power 
and  the  interpretation  of  the  laws  into  the  hands  of  men  who 
are  swayed  by  the  prejudices  of  a  class.  "Justices'  justice"  is 
a  proverbially  poor  sort,  and  one  of  the  chief  demands  of  the 
working  classes  in  the  agricultural  shires  is :  "  Give  us  stipen- 
diary magistrates  \"  So  in  Ireland,  the  "  assistant  barristers  " — 
professional  judges  supreme  on  the  local  bench,  though  bearing 
a  very  modest  name — are  found  to  be  the  mainstay  of  the  poorei 
classes  in  all  matters  of  the  interpretation  of  the  law. 

§  172,  As  in  the  enactment,  interpretation  and  administra- 
tion of  the  laws,  so  in  the  enforcement  of  civil  order  and  the 
Dational  defence, — every  class  of  transactions  is  a  source  of  ex- 
pense.     The  Foldier  and  the  policeman  discharge  duties  that 

179 


180  ELEMENTS    OF   POLITICAL   ECONOMY. 

were  once  incumbent  upon  every  male  citizen  ;  they  set  the  citi- 
zen free  to  employ  himself  as  he  will,  and  he  must  pay  for  the 
release.  And  if  the  state  interprets  its  vocation  as  extending  to 
the  sanitary  and  intellectual  welfare  of  the  people,  the  expense 
involved  becomes  still  greater.  It  must  take  measures  itself,  or 
require  municipalities  to  take  measures,  to  keep  its  cities  in  such 
a  state  of  cleanliness  as  shall  bring  up  the  average  health  of  the 
people  to  a  high  standard.  It  must  establish  public  schools  and 
colleges,  and  training  schools  for  teachers,  that  the  rising  gene- 
ration may  not  grow  up  in  ignorance.  It  must  set  up  post- 
offices,  to  promote  easy  intercourse  between  the  different  parts 
of  the  nation.  If  it  regard  religious  knowledge  as  essential  to 
good  citizenship,  it  may  endow  a  clergy  devoted  to  diffusing  it. 
In  these  and  a  thousand  other  ways  it  comes  to  pass  that  a  civi- 
lized nation  is  obliged  to  pay  for  the  advantages  of  a  free  gov- 
ernment, and  the  state  must  assess  upon  itself  in  some  form  taxes 
to  secure  a  sufficient  national  revenue.  Through  fees,  fines, 
costs  of  suits,  &c.,  it  can  throw  a  part  of  the  burden  upon  those 
who  are  most  immediately  concerned,  but  a  large  part  of  it  must 
be  discharged  by  the  community  as  such. 

§  173.  The  problem  of  so  imposing  taxes  that  they  may  be 
as  little  burdensome  as  possible  is  one  that  has  perplexed  states- 
men in  all  ages.  Some  of  the  methods  taken  to  raise  money 
for  current  expenses  without  taxation  are  sufficiently  curious. 
Down  to  quite  recent  times  lotteries  have  been  thus  made  use  of 
on  both  sides  of  the  Atlantic, — the  people  greedily  buying  a 
*'  ticket,''  each  acting  in  the  hope  that  one  of  the  great  prizes 
will  fall  to  him.  This  plan  is  now  justly  discredited  as  lowering 
the  tone  of  social  morality  by  giving  a  legal  sanction  to  gambling, 
and  fostering  thriftless  and  reckless  habits. 

Monopolies  have  been  another  device  of  state-craft.  The 
notion  that  the  state  possessed  exclusive  control  of  certain  trades, 
and  of  various  branches  of  commerce,  was  general  in  the  middle 
ages.  Even  where  no  fee  was  exacted,  it  was  usual  to  require  a 
charter  from  the  king  for  every  trade-guild,  and  this  was  after- 
ward made  a  source  of  revenue  to  the  government.     James  I 


DIRECT   AND   INDIRECT  TAXES.  181 

of  England  made  himself  especially  odious  to  the  mercantile 
classes  by  granting  monopolies  of  trade  in  great  numbers  to  liia 
court  favorites,  and  to  those  who  would  pay  roundly  for  them. 
This  system  was  in  some  cases  not  without  its  merits  as  a 
promoter  of  enterprise,  apart  from  its  relation  to  national 
revenue.  In  some  cases  great  undertakings  would  not  have  been 
begun  without  the  grant  of  a  temporary  monopoly  like  that 
given  to  the  East  India  company,  and  to  the  companies  that 
effected  the  first  English  settlements  in  America.  Monopolies 
of  the  tobacco  trade  exist  in  France;  of  salt  in  British  India. 
The  licenses  given  in  England  to  auctioneers,  pawnbrokers,  ped- 
lars, and  to  those  who  sell  tea  and  tobacco,  and  the  licenses 
required  in  most  countries  to  sell  spirituous  liquors,  are  some- 
thing of  the  same  nature. 

The  income  from  the  royal  demesnes  was  in  early  times  a 
chief  source  of  revenue.  But  these  have  been  so  largely  re- 
duced by  alienation,  and  are  so  small  in  proportion  to  the  revenue 
now  required,  that  they  play  littl/e  or  no  part  in  national  finance. 
The  sale  of  public  lands  once  brought  a  very  considerable 
revenue  to  the  United  States,  but  through  the  preemption  and 
homestead  laws  this  source  of  revenue  is  now  almost  closed. 

§  174.  Taxation,  direct  or  indirect,  is  now  the  chief  source 
of  revenue.  The  former  is  levied  either  (1)  upon  the  people 
according  to  numbers,  or  (2)  on  their  property,  real  and  personal, 
according  to  its  value,  or  (3)  on  articles  of  luxury  in  use  and 
possession,  or  (4)  on  the  annual  income  of  the  people.  The 
latter  is  levied  on  articles  produced,  usually  those  that  are  not 
of  prime  necessity,  or  on  imported  goods,  usually  such  as  are 
luxuries,  or  can  be  made  at  home. 

The  comparative  merits  of  direct  and  indirect  taxation  have 
been  much  disputed.  Both  forms  exist  in  this  country,  the 
former  being  that  chiefly  employed  by  the  state  and  municipal 
governments,  while  since  the  repeal  of  the  income  tax  the 
revenues  of  the  United  States  are  mostly  derived  from  indirecfc 
taxes. 

§  175.   Indirect  taxes  are  so  called  because  they  are  not  paid 


182  ELEMENTS   OF   POLITICAL   ECONOMY. 

into  the  treasury  by  the  person  who  really  bears  the  burden.  Tlie 
payer  adds  the  amount  of  the  tax  to  the  price  of  the  commodity 
taxed,  and  thus  the  taxation  is  concealed  under  the  increased 
price  of  some  article  of  luxury  or  convenience.  The  distribution 
of  such  taxation  by  the  payer  among  his  customers  is  not  so 
easy  a  matter  as  is  supposed.  English  economists,  applying 
their  formula,  ^'  all  things  find  their  level,"  have  treated  this 
distribution  as  a  thing  of  course.  But  experience  shows  that  the 
incidence  of  taxation  is  not  determined  by  laws  as  rigid  as  those 
of  hydraulics.  A  tax  is  often  paid  directly  and  finally  by  the 
person  on  whom  the  law  imposes  it,  and  makes  no  change  in 
prices.  Were  it  otherwise  direct  taxation  would  be  impossible, 
and  the  rich  man,  when  assessed  upon  land,  luxuries  or  income, 
would  pass  the  burden  on  to  his  dependent  neighbors. 

It  is  claimed  as  a  merit  of  indirect  taxation  that  vast  sums 
may  be  thus  raised  without  exciting  dissatisfaction,  or  even 
attracting  attention  ;  that  duties  which  bring  the  government 
forty  or  fifty  millions  cost  each  ^consumer  but  a  few  cents  a  week, 
and  are  paid  in  almost  daily  instalments.  As  Theodore  Parker — 
arguing  against  this  method — puts  it:  "The  people  must  pay  and 
not  know  it ;  must  be  deceived  a  little,  or  they  would  not  pay 
after  this  fashion."  The  expediency  of  the  method  is  all  the  more 
questionable  in  view  of  this  fact.  In  a  free  country,  where 
public  opinion  is  the  force  that  directs  and  controls  national 
policy,  it  is  eminently  desirable  that  the  people  should  feel  that 
they  are  taxed,  and  that  every  appropriation  of  the  legislature 
comes  out  of  their  pockets.  "  A  free  people  ought  to  know 
what  they  pay  for  their  freedom,  and  pay  it  joyfully;  and  they 
should  as  truly  scorn  to  be  cheated  into  the  support  of  their 
government  as  into  the  support  of  their  children.  In  the  next 
place,  a  large  revenue  is  no  blessing.  ...  A  revenue  rigorously 
proportioned  to  the  wants  of  a  people  is  as  much  as  can  safely  be 
trusted  to  men  in  power"  (Dr.  Channing). 

Another  objection  is  that  nearly  all  indirect  taxes  are  burden- 
some checks  upon  societary  circulation  and  the  interchange  of 
services, — not  the  less  really  such  because  their  action  is  not  so 


DIRECT    AND    INDIllKCT   TAXES.  183 

easily  percerved.  The  amount  of  water  in  the  channels  of  busi- 
ness may  be  lowered  but  a  few  inches,  but  that  few  inches  turns 
shallow  places  into  shoals,  and  impedes  the  whole  current.  The 
poor  especially  suffer  under  this  system  ;  these  little  assessments 
come  upon  them  pretty  much  in  proportion  to  their  numbers, 
not  at  all  in  proportion  to  their  means.  It  is  said  that  they  can 
exempt  themselves  by  ceasing  to  use  the  commodities  taxed, 
none  of  which  are  articles  of  prime  necessity.  So  they  would, 
perhaps,  if  they  realized  how  much  they  were  paying  in  the 
course  of  the  year,  but  the  "few  cents  a  week"  is  taken  so 
quietly  that  it  is  not  felt  to  be  the  burden  that  it  really  is. 

It  may  safely  be  laid  down  that  indirect  taxes  should  be 
assessed  only  on  those  articles  whose  consumption  it  is  desirable  to 
discourage,  and  if  it  be  possible  with  a  view  to  discourage  them, 
rather  than  to  revenue.  For  this  reason  all  internal  revenue 
duties, — except  on  spirits,  tobacco  and  the  like, — all  taxes  upon 
the  capital  or  dividends  of  corporations  who  have  not  received 
a  monopoly  of  their  business,  should,  unless  urgently  required 
for  revenue,  be  wiped  from  the  Statute  Book. 

Stamp  duties  are  sometimes  indirect  and  sometimes  direct. 
The  stamps  put  upon  mercantile  paper,  receipts,  and  the  like, 
come  under  the  former  head,  and  are  objectionable.  They  re- 
semble the  alcavala,  or  tax  upon  every  transfer  of  property  that 
did  so  much  to  blight  the  industry  of  Spain.  Taxes  imposed  in 
the  same  way  upon  inheritances  and  wills  are  not  so  objectionable, 
being  direct  taxes,  but  they  are  assessed  upon  property  that  is 
likewise  subject  to  income  or  property  taxes.  They  are  not  im- 
posed in  this  country,  although  there  are  taxes  upon  "  collateral 
inheritances*'  in  some  states;  but  the  stamp  taxes  on  beer-kegs 
and  on  cigar-boxes  are  instances  of  direct  taxation  by  means  of 
stamps. 

§  176.  Experience  shows  that  as  a  rule,  lighter  taxes  of  the 
indirect  sort  yield  a  larger  amount  of  revenue  than  those  that 
are  heavier.  In  political  arithmetic  two  and  two  do  not  always 
make  four.  Thus  Sir  Robert  Peel  and  Mr.  Gladstone  achieved 
their  great  reputation  as  financiers  partly  through  their  raising  a 


184  ELEMENTS   OF   POLITICAL   ECONOMY. 

larger  revenue  through  well-adjusted  but  lighter  tax  3S.  Similar 
to  this  was  the  immense  increase  in  the  post-ofl5ce  revenue 
through  the  lowering  the  rates  of  postage  to  two  cents  for  half- 
ounce  letters,  and  the  use  of  postal  cards.  In  each  case  the 
lowering  of  the  price  caused  a  great  increase  in  the  consumption 
which  more  than  balanced  the  loss  of  revenue  on  each  single 
amount.  This  fact  of  itself  shows  how  much  this  method  of 
taxation  interferes  with  the  business  of  a  country  and  checks 
the  exchange  of  services. 

In  other  cases  the  imposition  of  a  very  high  excise  or  im- 
portation duty  leads  to  smuggling  or  illicit  manufacture.  The 
duty  covers  the  risk  of  discovery  and  punishment,  and  those 
who  have  been  engaged  in  the  manufacture  or  the  importation 
excuse  themselves  for  defrauding  the  revenue  by  the  plea  that 
the  government  is  oppressing  their  business  and  waging  war 
upon  it.  In  general  the  tone  of  social  morality  is  not  so  high 
as  to  prevent  this  plea  from  having  some  weight  in  the  public 
opinion  of  the  country,  and  the  detection  and  punishment  of 
the  offender  become  difficult  and  expensive.  Thus,  under  the 
regime  of  high  excise  duties  imposed  1864-7,  whiskey  sold  in 
open  market  for  a  less  price  per  gallon  than  the  amount  of 
the  tax  per  gallon  upon  its  manufacture.  In  this  way  the 
business  passed  for  a  time  into  the  hands  of  illicit  distillers,  and 
all  others  were  obliged  to  stop. 

§  177.  Direct  taxation  is  paid  by  the  person  who  really  and 
finally  bears  the  burden.  In  most  cases  it  is  to  a  certain  extent 
indirect  also.  Thus  a  heavy  tax  on  real  estate  will  raise  rents, 
and  a  heavy  tax  on  incomes  will  affect  salaries.  But  neither  the 
house-owner  nor  those  who  receive  salaries  are  able  to  add  to 
their  receipts  in  anything  like  the  same  measure. 

Of  the  three  fbrms  of  direct  taxation — capitation  tax,  property 
tax  and  income  tax, — the  first  is  the  most  objectionable,  if  em- 
ployed to  raise  a  large  part  of  the  revenue.  A  small  capitation 
tax  upon  every  citizen  is  not  an  unfair  way  of  reminding  the 
voter  that  the  government  is  carried  Ob  at  the  expense  of  the 
people,     liut   a  heavy  tax  of  this  sort- -much   resorted   to  in 


PROPERTY   AND   INCOME   TAXES.  185 

earlier  times — has  all  the  disadvantages  of  indirect  taxation  ex- 
cept its  popularity. 

Property  taxes  are  assessed  either  upon  all  forms  of  property, 
real  and  personal,  in  proportion  to  its  value,  or  upon  articles  of 
luxury  included  among  personal  property ;  or  upon  real  estate 
alone.  The  first  is  the  method  practised  in  the  state  of  New 
York ;  the  last  is  that  in  use  in  Pennsylvania,  and  is  now  gener- 
ally thought  the  wiser  one.  So  much  of  personal  property  is 
now  held  in  the  form  of  bonds,  mortgages,  &c.,  that  can  be  sent 
out  of  the  state  as  the  day  for  making  returns  comes  round,  that 
the  evasion  of  a  law  taxing  this  sort  of  property  is  very  easy. 
But  real  estate  cannot  be  hidden,  and  a  tax  upon  it  reaches  all 
classes,  though  not  equally.  It  raises  house-rent,  &c.  As 
assessments  upon  real  estate  must  be  made  by  public  officers,  the 
collection  of  the  tax  is  expensive  and  it  is  liable  to  great  abuses 
through  favoritism. 

§  178.  The  most  modern  and  theoretically  the  fairest  form  of 
taxation  is  the  income  tax.  It  seems  to  make  every  one  con- 
tribute to  the  wants  of  the  state  in  proportion  to  the  revenue 
which  he  enjoys  under  its  protection  ;  while,  "  by  falling  equally 
on  all,  it  occasions  no  change  in  the  distribution  of  capital  or  in 
the  material  direction' of  industry,  and  has  no  influence  on 
prices"  (McCulloch).  No  other  is  so  cheaply  assessed  and  col- 
lected; no  other  brings  home  to  the  people  so  forcibly  the  fact 
that  it  is  their  interest  to  insist  on  a  wise  economy  of  the  national 
revenue. 

The  first  English  income  tax  was  imposed  by  Pitt  1798-1802, 
and  renewed  1803-1815.  In  the  middle  ages  the  feudal 
tenure  upon  military  service  saved  large  expenses  for  the  national 
defence,  and  most  of  the  domestic  aflfairs  of  the  kingdom  were 
administered  by  local  authorities.  The  income  of  the  royal 
demesnes  was  supplemented  by  customary  feudal  fines  and  pay- 
ments, and  by  a  capitation  or  poll  tax.  At  the  outbreak  of  the 
Civil  war  the  first  excise  taxes  were  imposed,  but  with  the  pledge 
that  they  would  be  abolished  at  the  return  of  peace.  The  first 
Parliumunt  aft<;r  the  liestoration  was  controlled  by  the  landed 


186  ELEMENTS    OF   POLITICAL   ECONOMY. 

interest ;  it  abolished  all  duties  on  the  land,  whether  of  service 
or  payment,  and  confirmed  to  the  landowner  all  rights  without 
duties  The  feudal  system  came  to  an  end  at  once.  From  this 
time  excises  and  customs  were  multiplied  by  parliaments  made 
up  of  landlords.  At  the  Revolution  the  Whigs  came  to  power, 
and  the  country  gentlemen  found  themselves  in  a  minority,  but 
still  strong  enough  to  prevent  the  imposition  of  any  but  the 
most  trifling  taxes  on  land.  The  rate  of  these  taxes  was  after- 
wards through  their  influence  made  permanent  and  the  prin- 
cipal commutable  at  the  pleasure  of  the  landowner,  and  Mr. 
Pitt  was  defeated  in  his  attempts  again  to  make  the  land  con- 
tribute its  fair  share.  His  income  tax  was  a  compromise  that 
assessed  the  landlord's  permanent  revenue  and  the  trader's  pre- 
carious profits  equally.  At  present  the  whole  land-tax  of  Eng- 
land is  about  one-fiftieth  of  the  revenue,  while  landed  property 
constitutes  a  very  large  part  of  the  whole  wealth  of  the  nation. 

By  1840  the  indirect  system  had  attained  the  perfection 
humorously  described  by  Sidney  Smith :  "  Taxes  upon  every 
article  which  enters  into  the  mouth,  or  covers  the  back,  or  is 
placed  under  the  foot, — taxes  upon  everything  which  is  pleasant 
to  see,  hear,  feel,  smell  or  taste, — taxes  upon  warmth,  light  and 
locomotion, — taxes  on  everything  on  the  earth  and  the  waters 
under  the  earth, — taxes  on  everything  that  comes  from  abroad 
or  is  grown  at  home, — taxes  on  the  raw  material, — taxes  on 
every  fresh  value  that  is  added  to  it  by  the  industry  of  man, — 
taxes  on  the  sauce  that  pampers  the  rich  man's  appetite,  and 
the  drug  that  restores  him  to  health, — on  the  ermine  which 
decorates  the  judge,  and  the  rope  which  hangs  the  criminal, — 
on  the  poor  man's  salt  and  the  rich  man's  spice, — on  the  brass 
nails  of  the  coffin,  and  the  ribands  of  the  bride, — at  bed  or 
board,  couchant  and  levant,  we  must  pay.  The  schoolboy  whips 
his  taxed  top, — the  beardless  youth  manages  his  taxed  horse 
with  a  taxed  bridle,  on  a  taxed  road ;  and  the  dying  English- 
man, pouring  his  medicine  which  has  paid  7  per  cent,  into  a 
spoon  that  has  paid  15  per  cent.,  flings  himself  back  upon  his 
chintz  bed  which  has  paid  22  per  cent.,  and  expires  in  the  arms 


peel's  income  tax  laivs.  187 

of  an  apothecary  who  has  paid  &  license  of  a  hundred  pounds 
for  the  privilege  of  putting  him  to  death.  His  whole  property 
is  then  immediately  taxed  from  two  to  ten  per  cent.  Besides 
the  probate,  large  fees  are  demanded  for  burying  him  in  the 
chancel  j  his  virtues  are  handed  down  to  posterity  on  taxed 
marble  j  and  he  is  then  gathered  to  his  fathers  to  be  taxed  no 
more." 

§  179.  Sir  Robert  Peel  imposed  the  new  income  tax  in  1842, 
in  a  time  of  general  distress,  after  a  series  of  great  deficits  in 
the  annual  budget.  It  brought  in  so  much  revenue  that  he  and 
his  successors  in  the  treasury  were  able  to  relieve  the  mass  of 
the  people  from  the  burden  of  some  indirect  taxes  and  to  lower 
others.  This  last  step,  it  was  found,  still  farther  increased  the 
revenue,  and  these  reductions  became  a  settled  policy  in  British 
Finance.  But  the  whole  British  system,  the  income  tax  ex- 
cepted, must  still  be  classed  among  the  measures  of  bad  policy  by 
which  the  inequalities  of  condition  are  preserved  and  fostered. 
Seven-eighths  of  the  revenue  is  still  raised  by  indirect  taxation, 
and  the  proposal  to  raise  it  all  by  the  same  means  was  made  by 
Mr.  Gladstone  at  the  general  election  of  1874,  but  shared  in 
bis  general  defeat.  The  revenue  is  raised  by  duties  upon  a  few 
articles  in  general  use,  such  as  sugar,  tea,  coffee,  spirits  and 
wine;  while  articles  of  expensive  luxury,  laces,  satins  and 
velvets,  have  been  exempted.  Cobden,  Bright  and  some  others 
advocate  the  removal  of  most,  if  not  all,  the  existing  duties  and 
excises,  and  ask  that  the  workingman's  breakfast  table  be  free 
from  all  taxation. 

§  180.  The  objections  to  the  income  tax,  however,  are  very 
strong.  (1)  That  it  is  inquisitorial.  It  demands  of  the  citizen 
a  statement  of  his  affairs  for  each  current  year,  and  this  he  must 
make  to  commissioners  who  are  his  neighbors,  and  perhaps  his 
rivals  in  trade.  This  objection  is  hardly  a  sufficient  one  in  case 
the  tax  returns  are  not  published.  If  they  are,  there  can  be  no 
doubt  that  it  is  a  hardship  for  a  tradesman  to  be  obliged  to  in- 
form the  public  that  he  has  had  rather  a  bad  year  of  it,  and 
has  hardly  been  able   to  make  both  ends  meet.     In  many  cases 


188  ELEMENTS   OF   POLITICAL   ECONOMY. 

it  is  well  known  that  persons  reported  and  paid  taxes  upon  a 
much  larger  income  than  they  actually  received,  purchasing 
thus  a  reputation  for  wealth  and  prosperity. 

(2)  Reports  are  more  commonly  dishonest  in  the  other  direction. 
To  escape  taxation,  incomes  are  returned  as  much  less  than  the 
fact.  This  has  been  frequently  the  case  in  England,  where  no 
publication  of  returns  is  made.  Income  from  land  and  houses 
is  indeed  very  easily  ascertained,  but  that  from  trade  and  pro- 
fessions must  be  taken  on  the  faith  of  the  citizen.  Certain 
London  shopkeepers,  whose  stores  were  removed  to  make  way 
for  a  city  railroad,  made  claim  for  compensation  on  the  basis  of 
annual  profits,  aggregating  five  times  as  much  as  they  had  put 
on  their  tax-papers,  and  a  jury  cut  down  the  estimate  only  to 
three  times  as  much. 

(3)  The  equal  assessment  upon  all  sorts  of  income  is  claimed  to 
be  unfair.  The  lump  value  of  two  incomes  of  $5000 — one  per- 
manent as  derived  from  real  estate,  and  the  other  precarious 'as 
depending  upon  the  profits  of  a  trade — is  very  different;  but  the 
law  taxes  both  equally.  This  may  be  obviated  by  careful  legis- 
lation. 

The  great  problem  to  devise  an  income-tax  law  that  shall  en- 
force honest  returns  without  resorting  to  wholesale  publicity,  and 
shall  duly  discriminate  between  different  forms  of  income,  has 
not  yet  been  solved.  Till  such  a  law  is  obtained,  the  least 
objectionable  form  of  taxation  must  be  that  assessed  on  per- 
sonal and  real  estate.  To  make  direct  taxation  on  personal 
estate  effective,  it  should  be  levied  on  stocks  through  the 
company  in  which  they  are  held,  and  deducted  by  the  com- 
pany from  the  amount  of  the  dividends.  To  assess  it  on  divi- 
dends merely  would  be  a  mistake.  Many  companies  are  so  situ- 
ated that  they  do  not  care  to  declare  dividends,  though  they 
earn  them.  They  go  on  year  after  year  turning  their  net  profits 
into  principal  invested,  and  the  proprietors  live  on  income  from 
other  sources. 

No  income  tax  will  probably  be  again  imposed  in  the  United 
States  for  many  years.     But  if  the  industry  of  the  country 


THE   COLLECTION   OF   TAXES.  189 

should  ever  reach  such  a  heij^ht  of  development  as  to  enable  her 
to  furnish  herself  with  the  most  of  what  she  now  imports  from 
Europe,  the  revenue  from  customs  will  then  be  inade(iuate  to  the 
needs  of  the  government.  New  revenue  from  some  other  source 
will  take  its  place.  If  an  income  tax  should  be  again  adopted, 
one  of  the  most  important  questions  in  regard  to  it  will  be 
whether  all  incomes,  whatever  their  amount,  should  pay  the 
same  percentage.  The  law  that  Pitt  devised,  and  all  others  in 
England  down  to  1861,  made  a  discrimination  between  large  and 
small  incomes,  and  taxed  the  former  more  heavily.  Since  that 
year  all  incomes  not  exempted  have  been  taxed  equally,  and  the 
United  States  law  was  severely  censured  by  some  British  writers 
for  exacting  a  "progressive  rate"  of  5,  7 J  and  10  per  cent,  for 
diflferent  incomes.  Now  taxation  should  be  proportioned  either  to 
income  or  to  ability  to  bear  it.  If  the  former,  then  the  English 
law  is  unjust  in  exempting  incomes  below  £100  ;  if  the  latter, 
the  American  law  and  the  earlier  English  laws  were  not  unjust 
in  making  a  discrimination  among  taxed  incomes.  It  would  be 
unjust  to  make  the  discrimination  excessive,  and  tax  all  incomes 
above  a  certain  sum — 50,  75  or  100  per  cent.^as  some  wild 
theorists  in  France  proposed.  But  the  want  of  some  discrimi- 
nation must  be  reckoned  among  those  defects  of  English  legis- 
lation that  have  tended  to  perpetuate  and  increase  the  vast  dis- 
crepancies in  English  wealth. 

The  practical  objections  to  this  form  of  taxation  make  a  tax 
on  land  far  less  objectionable,  especially  in  a  country  whose 
resources  are  imperfectly  developed  and  its  wealth  unevenly 
distributed. 

§  18L  Among  the  important  points  in  the  economy  of  taxa- 
tion are  (1)  cheap  collection  ;  (2)  popular  certainty  as  to  amount 
and  time.  Both  these  and  every  other  wise  principle  were  set 
at  nought  by  the  system  of  farming  the  revenue  adopted  under 
the  Roman  empire  and  in  France  before  the  Revolution,  and 
still  perpetuated  in  some  Mohammedan  countries.  The  taxes 
were  sold  at  public  auction  to  a  class  of  persons  who  remuner- 
ated themselves  by  wringing  the  utmost  farthing  out  of  the  poor. 


190  ELEMENTS   OF   POLITICAL    ECONOMY. 

The  popular  hatred  and  detestation  of  the  publican  class,  dia. 
closed  to  us  in  the  Gospels,  related  to  this  custom,  and  was  well 
deserved  and  universal  throughout  the  empire.  Jewish  tradi 
tion  records  but  one  honest  publican. 

The  second  principle  is  also  violated  by  unforeseen  changes  in 
the  revenue  system  of  a  country  that  employs  indirect  taxation. 
Business  men  lose  very  much  by  every  new  piece  of  tinkering 
expended  upon  the  tariff.  They  must,  therefore,  on  the  prin- 
ciple of  insuring  themselves,  put  a  larger  profit  upon  all  com- 
modities, so  that  the  lack  of  a  wise  and  steadfast  national 
policy  inflicts  a  tax  upon  the  people  that  brings  no  return  to  the 
treasury. 

§  182.  Ordinarily  the  taxation  of  a  year  should  at  least  pay 
the  national  expenditure  of  the  year.  A  nation  that  does  not 
"  make  both  ends  meet "  in  times  of  peace  and  of  no  extraordi- 
nary calamity,  cannot  be  regarded  as  wisely  governed.  But 
times  that  call  for  a  vast  extraordinary  outlay  of  national  wealth 
are  incident  to  the  history  of  every  nation.  In  periods  of  great 
wars,  for  instance,  the  government  n/ust  raise  sums  of  money 
which  far  exceed  those  that  it  ordinarily  raises  by  taxation,  and 
national  debts  are  incurred,  to  be  gradually  paid  off  on  the  return 
of  peace.  These  debts  are  of  no  modern  invention,  but  the 
fashion  of  paying  them  came  in  about  the  close  of  the  seven- 
teenth century.  The  power  of  one  generation  of  a  nation  thus 
to  bind  not  only  itself  but  subsequent  generations  is  now  an 
accepted  principle. 

Are  war  debts  really  necessary  ?  Perhaps  not ;  any  prosperous 
and  free  people  that  unanimously  undertake  a  just  war,  and  are 
not  already  encumbered  by  previous  debts,  could,  by  vigorous 
exertion,  pay  their  way  as  they  go.  Prussia  avoids  war-debts  ; 
the  wars  of  Frederick  the  Great  left  the  country  greatly  de- 
pressed and  exhausted,  but  without  a  dollar  of  indebtedness. 
The  Hohenz:)llerns,  it  has  been  said,  brought  good  business 
abilities  with  them  from  Nuremberg.  England's  great  war  with 
the  first  French  Empire  left  the  country  the  burden  of 
£600,000,000  of  debt.     Had  she  beojun   the  war  with  a  clear 


WAR   DEBTS   NOT   NECESSARY.  191 

financial  record,  and  assessed  every  year  the  same  amount  of  the 
total  taxation  raised  during  its  continuance,  she  would  have 
come  out  of  it  with  a  surplus  in  the  treasury.  Could  the  taxa- 
tion have  been  raised  one-third  higher  than  it  actually  was 
during  our  recent  civil  war,  and  kept  at  that  from  first  to  last  for 
five  years,  the  country  would  have  come  out  of  the  struggle  with 
no  indebtedness.  This  is  the  policy  that  all  great  writers  on 
finance, — Hume,  Adam  Smith,  Ricardo,  McCulloch,  &c., — 
recommend.  For  political  reasons,  good  or  bad,  it  is  never 
adopted.  It  is  feared  that  a  great  Increase  of  the  immediate 
public  burdens  will  strengthen  the  peace-party  and  weaken  the 
government.  It  is  thought  that  the  people  are  not  at  first  aware 
of  the  magnitude  of  the  sacrifices  required  of  them,  and  heavy 
taxes  are  not  imposed  till  the  war  is  coming  near  a  close.  For 
these  and  the  like  reasons  the  nation  comes  into  the  money 
market  as  a  borrower.  Thus,  it  is  thought,  the  burden  will  be 
80  distributed  as  to  be  imperceptible  and  lightly  borne.  But  all 
such  attempts  at  distribution  add  to  its  real  weight  and  to  the 
injury  it  inflicts. 

§  183.  Governments  generally  borrow  at  a  great  disadvantage 
when  great  capitalists  control  the  money  market.  The  public 
credit  is  at  the  lowest  point  in  war  times,  and  no  patriotism 
holds  men  back  from  taking  advantage  of  this.  In  former  times 
this  was  remedied  in  a  vigorous  way;  Colbert  cut  down  the 
capital  of  the  public  debt  to  the  amount  actually  furnished  by 
each  lender,  and  treated  the  surplus  as  an  illegal  because  usurious 
exaction.  By  this  partial  repudiation  he  brought  up  the  public 
credit  at  once  and  was  able  to  borrow  at  very  reasonable  rates. 
The  British  ministry  in  the  reign  of  Queen  Anne  replaced  all 
the  old  loans  by  others  that  paid  interest  at  market  instead  of 
war  rates;  giving  the  lenders  the  choice  between  that  and  re- 
demption. During  the  war  that  England  waged  with  Napoleon 
her  capitalists  were  on  the  outlook  to  prevent  any  renewal  of 
that  proceeding.  The  government  was  forced  or  induced  to 
fund  the  debt  as  fast  as  it  was  contracted.  That  is,  money  was 
raised  by  selling  perpetual  annuities,  redeemable  at  par,  for  such 


192  ELEMENTS    OF   POLITICAL   ECONOMY.    . 

price   as   they  would    bring  in   the  market.     These  annuities, 
considered  as  the  interest  upon  the  nominal  principal,  were  at 
very  low  rates,  but  the  principal  itself  was  not  paid  in  full  to 
the  government.     The  buyer  offered  to  take  the  loan  at  thirty, 
forty  or  fifty  per  cent,  discount,  according   to  the  state  of  the 
money  market.     Thus  of  the  600  millions  sterling  added  to 
the  national  debt,  only  484  millions  was  actually  paid  to  the 
government.     The  perpetual  annuities  amounted  to  3  per  cent, 
interest  upon  the  nominal,  and  5 J  per  cent,  upon   the  actual 
loans.     With  every  rise  in  the  national  credit,  the  nominal  value 
has  become  more  nearly  the  actual  one,  so  that  even  by  pur- 
chases in  open  market  the  nation  could   now  redeem  its  debt 
only  at  the  par  value,  i.  e.,  by  paying  a  sum  to  its  creditors  that 
it  never  received  from  them.     As  capital  is  worth  much  more 
than  3  per  cent.,  taking  year  with  year,  it  is  thought  by  many  a 
saving   not  to  pay  the  debt.     Others  oppose   payment  on    the 
ground  that  its  wide  distribution  imparts  a  certain  stability  to 
the  whole  political  edifice  by  identifying  the  interests  of  the 
people  with  those  of  the  government.     Cobden,  Bright  and  the 
Manchester  school  generally  oppose  its  payment  on  the  ground 
that  it  holds  England  back  from  engaging  in  new  wars,  by  putting 
her  under  bonds  to  keep  the  peace.     The  population  of  England 
is  twice  as  great,  and  her  wealth  four  times  as  great,  as  when  the 
debt  was  contracted  two  generations  ago,  yet  its  amount  has  been 
but  slightly  diminished.     Few  people  seem  to  expect  that  it  ever 
will  be  paid,  and  one  Tory  organ,  denouncing  Gladstone  for  his 
policy  of  harassing  interests,  expressed  the  fear  that  he  would 
be  for  attacking  the  national  debt  next.     Two  measures,  how- 
ever, look  toward  its  redemption.     There  is  a  Sinking  Fund 
managed  by  commissioners,  which  uses  such  money  as  is  placed 
at  its  disposal  to  buy  up  *'  consols,"  and  hold  them  at  interest, 
expending  that  interest  in  fresh  purchases.     Another  measure 
of  Mr.  Gladstone's  has  been  to  sell  terminable  annuities  charge- 
able to  the  budget,  and  buy  up  with  the  proceeds  the  perpetual 
annuities  formerly  granted.     But    at   the  present    rate  of  re- 


ENGLISH   AND   AMERICAN   POLICY.  193 

deiuption  four  centuries  must  elapse  before  the  whole  would  be 
discharged. 

§  184.  The  United  States  have  always  acted  on  the  policy 
of  speedy  redemption.  The  debt  of  the  Revolution  and  that 
of  the  second  war  with  England  were  discharged  by  1885,  less 
than  sixty  years  after  the  former  began.  At  the  rate  of  redemp- 
tion pursued  since  the  close  of  the  civil  war,  the  nation  would 
be  out  of  debt  by  1890,  and  much  sooner  if  the  national  revenue 
be  not  reduced  and  the  large  sums  that  are  now  expended  in 
paying  interest  are  applied  to  paying  the  principal. 

§  185.  The  existing  debt  of  the  United  States  was  not  funded 
as  fast  as  contracted ;  high  rates  of  interest  were  offered  rather 
than  large  discounts  on  the  principal.  Secretary  Chase,  what- 
ever his  mistakes,  strove  to  keep  the  debt  under  national  control, 
and  even  borrowed  for  periods  that  were  far  too  short,  so  that 
some  of  his  earlier  loans  fell  due  during  the  war.  Afterwards 
three  forms  of  bonds  were  adopted, — 7-30s,  8-40s  and  5-20s, 
the  two  latter  being  payable  at  option  at  any  time  between 
eight  and  forty  years,  &c.,  after  issue.  Yet,  as  in  England, 
the  real  rate  of  interest  upon  the  debt  is  much  higher  than  the 
nominal  one, — in  some  cases  nearly  eleven  per  cent,  instead  of 
six.  The  government  had  made  large  issues  of  paper  money, 
which  after  a  time  depreciated  in  value  very  greatly,  fluctuating 
with  the  course  of  our  military  history,  as  the  public  confidence 
in  its  redemption  rose  or  fell.  But  vast  quantities  of  this  money 
were  subscribed  for  United  States  bonds  and  accepted  at  par ; 
so  that  the  nation  received  on  an  average  about  fifty-seven  cents 
in  gold  on  the  dollar  for  its  obligations,  on  which  it  pays  full 
interest  and  is  bound  in  all  honesty  to  pay  the  full  principal. 
This  is  the  calculation  of  Prof.  Bowen  of  Harvard  College. 

§  186.  So  long  as  the  government  continued  to  borrow  money 
and  to  accept  this  paper-money  at  par  in  subscriptions  for  loans,  it 
was  not  strictly  an  inconvertible  currency,  and  the  country  had 
to  some  extent  the  control  of  its  volume.  When  the  government 
ceased  to  borrow,  it  lost  this  redeeming  feature,  and  became  a 
13 


194  ELEMENTS    OF    POLITICAL   ECONOMY. 

currency  of  the  most  objectionable  type.  The  question  was  then 
raised  whether  it  should  be  allowed  to  continue  thus,  or  steps  be 
taken  to  bring  it  to  par  with  gold.  Here  two  parties  were  devel- 
oped. One  proposed  to  accumulate  gold  in  the  treasury,  and  fix 
a  day  for  resumption.  The  other  proposed  to  make  these  notes 
convertible  into  bonds  bearing  interest  at  3.65  per  cent,  or  some 
similar  rate,  and  reconvertible  into  treasury  notes  at  any  time  at 
the  holder's  option.  The  former  plan  prevailed,  and  was  carried 
into  efi"ect  January  1,  1879. 

The  steady  appreciation  of  our  paper-money  under  the  steps 
preliminary  to  resumption  caused  great  suffering  to  the  debtor 
classes  of  the  country.  Farmers,  for  instance,  who  had  borrowed 
money  on  mortgage  when  the  dollar  was  worth  sixty  cents  in  gold, 
found  themselves  obliged  to  repay  these  mortgages  in  dollars  worth 
one  hundred  cents.  They  very  naturally  resisted  the  policy  which 
made  this  necessary,  not  only  as  regards  their  own  debts,  but  also 
those  of  the  government.  Hence  the  risa  of  the  Greenback 
Party,  with  its  theory  that  money  is  the  creation  of  a  govern- 
mental fiat,  its  demand  that  the  debt  be  paid  in  paper-money, 
and  its  proposal  to  substitute  treasury  notes  for  national  bank 
notes.  The  party  reached  its  maximum  strength  during  the  years 
of  business  distress  which  began  in  1873,  and  declined  with  the 
actual  resumption  of  specie  payments  and  the  revival  of  our  in- 
dustries. There  is  a  possibility  that  its  proposal  to  replace  bank 
by  treasury  notes  may  come  to  the  front  again  when  the  repay- 
ment of  the  outstanding  bonds  has  gone  so  far  as  to  deprive  the 
banks  of  the  basis  on  which  their  paper-money  rests.  (See  §  170.) 
Instead  of  devising  some  other  basis  of  issue  equally  or  sufiiciently 
secure,  it  will  bo  proposed  to  issue  an  equal  amount  of  treasury 
notes.  As  a  note  is  a  debt  bearing  no  interest,  owed  by  the  issuer 
to  the  holder,  there  would  seem  to  be  some  fairness  in  asking  that 
the  privilege  of  such  issues  should  be  confined  to  the  government. 
But  any  advantage  which  would  be  derived  from  making  such 
issues  a  government  monopoly  would  be  more  than  counterbal- 
anced by  the  loss  to  the  country  through  the  destruction  of  its 
local  centres  of  issue,  and  the  substitution  of  the  Treasury  at 


INTERNAL   REVENUE   TAXATION.  195 

Wiishington  and  its  branches  in  the  great  cities  as  the  only 
places  of  issue.  Our  monetary  system  tends  too  much  to  cen- 
tralization already.  This  plan  would  increase  that  tendency 
tenfold.  It  would  destroy  many  of  the  country  banks,  which 
depend  on  the  privilege  of  issue  for  their  profits,  and  in  this 
way  would  deprive  us  of  the  most  important  agencies  for  the 
facilitation  of  association  and  the  fertilization  of  industry. 

§  187.  During  the  war  the  government  found  it  necessary  to 
establish  a  system  of  internal  revenue  taxation,  by  which  a  great 
number  of  articles  were  made  to  contribute  to  its  support.  When 
the  necessity  for  such  a  revenue  ceased,  these  taxes  were  removed, 
with  the  exception  of  duties  on  whiskey,  tobacco,  playing-cards, 
matches,  patent  medicines  and  bank-checks,  and  a  tax  on  the 
capital  and  deposits  of  banks.  The  removal  of  all  these  except 
the  two  first  is  now  accepted  generally  as  advisable.  But  there 
is  good  reason  for  objecting  to  these  two  being  made  exceptions. 
Of  course  the  appetite  for  whiskey  and  that  for  tobacco  are  as 
legitimate  objects  of  taxation,  with  a  view  to  discouragement,  as 
anything  can  be.  But  these  taxes  fall  upon  the  States  with  no 
fair  reference  to  their  ability  to  bear  the  burden  they  impose. 
In  particular,  the  Southern  States  pay  under  the  whiskey  and 
tobacco  taxes  large  sums  into  the  national  treasury  which  would 
be  better  expended  on  the  education  of  their  people  and  the 
payment  of  their  debts.  These  taxes  should  be  removed,  not  to 
give  the  country  "free  whiskey"  or  "free  tobacco,"  but  to  en- 
able the  States  to  relieve  their  necessities  from  this  very  source 
of  revenue. 

§  188.  The  United  States  government  is  one  of  a  series  of 
governments — national,  State,  and  county  or  township  or  muni- 
cipal— whose  aggregate  costliness  is  greater  than  that  of  any 
other  system  in  the  world.  All  our  ofiicials  are  paid,  and  we 
have  more  of  them  in  proportion  to  the  population  than  has  any 
other  country.  Under  the  peculiar  provisions  of  the  national 
Constitution,  the  general  government  discharges  fewer  functions 
than  in  any  other  country,  except  perhaps  Germany.  It  leaves 
to  the  States  the  local  police  and  the  most  part  of  the  manage- 


196  ELEMENTS    OF    POLITICAL   ECONOMY. 

ment  of  civil  and  criminal  justice,  but  it  retains  to  itself  sev- 
eral of  the  easiest  and  most  popular  sources  of  revenue,  and 
compels  the  States  to  raise  their  revenue  by  direct  taxation 
mainly.  It  alone  can  impose  duties  on  imports.  It  alone  can 
levy  internal  revenue  taxes  in  such  a  way  as  not  to  discourage 
the  production  of  any  article  in  any  particular  locality.  Ordi- 
narily, the  revenue  of  the  general  government  must  be  much  in 
excess  of  its  legitimate  expenses.  This  leads  to  very  gross  abuses 
in  congressional  legislation,  by  which  large  sums  of  this  surplus 
are  appropriated  for  public  works  which  have  no  real  claim  upon 
the  national  treasury.  It  would  be  much  better  to  arrange  for 
its  distribution  among  the  States  in  proportion  to  population,  as 
was  done  with  the  surplus  of  1835.  Such  a  distribution  could 
be  accompanied  by  conditions  as  to  its  expenditure  in  the  educa- 
tion of  the  illiterate  and  the  extinction  of  local  and  State  debts. 
It  would  bind  the  States  more  closely  to  the  national  Union, 
while  relieving  their  people  of  burdens  which  at  presept  press 
with  severity  upon  many  of  them. 


CHAPTER  TENTH. 
The  Science  and  Economy  oe  Commerce. 

§  189.  Commerce  is  the  interchange  of  services  or  pro- 
ductions between  persons  of  different  industrial  functions,  effected 
either  directly  or  through  the  intervention  of  third  parties 
The  motive  to  suck  an  interchange  is  found  in  the  fact  that  the 
labor  which  each  expends  upon  the  production  of  the  article 
which  he  gives  is  less  than  that  which  he  would  have  to  expend 
to  reproduce  the  article  which  he  receives.  Thus  each  receives, 
therefore,  what  is  of  greater  value  to  him,  than  what  he  gives. 

§  190.  Commerce  is  therefore  the  outgrowth  of  the  division 
of  labor,  and  has  kept  pace  with  that  in  its  growth.  In  the 
first  stage,  commerce  existed  only  between  persons  of  the  same 
family  or  tribe,  and  involved  no  formal  exchange  of  commodities. 
The  savage  husband  undertook  the  dangerous  duties  of  hunting, 
fishing  and  war;  the  wife  the  laborious  work  of  the  household 
and  their  petty  agriculture.  Both  shared  in  the  products. 
Afterwards  members  of  the  same  tribe  rendered  each  other 
certain  customary  services,  such  as  mutual  help  in  the  pastur- 
age of  the  cattle  and  the  tillage  of  the  fields  of  the  marh  (§  80). 
Then  through  the  rise  of  a  difference  of  employments  or  pos- 
sessions between  the  tribes,  a  piece  of  neutral  ground  became 
the  meeting  place  of  a  group  of  these  tribes  for  mutual  ex- 
changes, in  which  exchange  cattle  were  used,  less  as  money 
than  as  a  standard  to  estimate  comparative  values.  Then  arose 
a  class  of  traders,  whose  business  it  was  to  facilitate  exchanges 
by  ascertaining  the  reciprocal  wants  of  different  persons,  and  to 
negotiate  for  terms  advantageous  to  each.  Either  from  the  first 
or  in  course  of  time,  these  traders  became  possessed  of  capital 
enough  to  purchase  what  was  offered  for  sale,  which  they  then 
again  offered  to  those  who  needed  it,  on  terms  advantageous  to 
themselves. 

The  rise  of  this  class  was  clearly  an  advance  in  social  develop- 

197 


198  ELEMENTS   OF   POLITICAL   ECONOMY. 

ment.  A  function  hitherto  discharged  by  persons,  who  might 
bo  better  employed,  was  transferred  to  mjre  competent  men. 
The  trader  knew  the  demand  and  supply  of  every  article  more 
thoroughly  and  readily  than  its  producers  or  its  consumers  :  to 
obtain  that  knowledge  was  his  special  work.  Instead  of  spending 
much  of  their  time  in  searching  for  a  customer,  producers  found 
it  to  their  advantage  to  employ  his  knowledge  and  skill,  and  to 
devote  the  time  thus  saved  to  larger  production.  While  he 
added  nothing  directly  to  the  amount  or  the  utility  of  the  pro- 
ducts of  industry,  he  helped  to  increase  the  amount  of  pro- 
duction indirectly  by  economizing  the  time  of  the  producers. 

One  of  the  most  important  of  these  traders  is  the  banker  or  dealer  in 
money,  whose  function  has  already  been  discussed.  All  that  is  said  in 
Chapter  VIII.  is,  in  some  sense,  a  subordinate  part  of  this  chapter. 

§  191.  Still  the  trader,  the  middleman  or  go-between  of  these 
exchanges,  is  but  a  means  or  instrument,  whose  end  is  com- 
merce. And  as  in  the  case  of  other  instruments,  how  to  dispense 
as  much  as  possible  with  his  services  is  one  of  the  problems  of 
economic  organization.  His  power  over  the  producer  and  the 
consumer,  which  is  measured  by  the  proportion  that  his  profits 
bear  to  the  value  of  the  article  exchanged,  declines  steadily 
with  the  advance  of  society  in  intelligence  and  the  power  of 
association.  In  the  early  time  he  took  a  very  large  share,  be- 
cause the  producer  and  consumer  being  at  a  distance  from  each 
other,  knew  little  of  each  other,  and  because  the  risks  and  the 
expenses  of  his  business  were  great.  Afterwards  his  profits  de- 
clined, mainly  because  with  the  growth  of  population  and  the 
advance  of  mutual  knowledge,  the  chances  of  producer  and  con- 
sumer dispensing  with  his  services  and  dealing  directly  with 
each  other,  increased.  But  even  now  his  profit  is  a  tax  upon 
both,  which  should  be  reduced  to  a  minimum.  For  he  adds 
nothing  to  the  real  wealth  of  society  He  neither  directs  and 
manages  a  vital  change  in  the  form  of  matter  as  does  the 
farmer,  nor  a  chemical  and  mechanical  change  in  form  as  does 
the  manufacturer.  He  merely  transfers  things  from  the  place 
of  their  production  to  the   place  of  demand  :  The  products  of 


DISTANT   AND   NEAR   COMMERCE.  199 

other  men's  labor  pass  unchanged  through  his  hands, — with 
their  value  increased  by  the  cost  of  transportation  and  the 
amount  of  his  profits. 

When  Charles  Fourier  was  young,  he  was  on  a  visit  to  Paris,  and 
priced  at  a  street  stall  some  apples  of  a  sort  that  grow  abundantly  in  liig 
native  province.  He  was*  amazed  to  find  that  they  sold  for  many  times 
the  sum  that  they  would  bring  at  home,  having  passed  through  the  hands 
of  a  host  of  middlemen  on  their  way  from  the  owner  of  the  orchard  to 
the  eater  of  the  fruit.  The  impression  received  at  that  instant  never 
left  him  ;  it  gave  the  first  impulse  to  his  thinking  out  his  socialistic 
scheme  for  the  reconstruction  of  society,  in  which,  among  other  sweeping 
changes,  the  whole  class  of  traders  and  their  profits  are  to  be  abolished. 

§  192.  It  is  evident  that  the  amount  of  this  tax  upon  indus- 
try is  greatest  when  the  consumer  and  producer  are  at  the 
greatest  distance  from  each  other,  and  are  consequently  most 
dependent  upon  the  trader.  Where  the  producer  has  the 
market  close  at  hand  he  is  under  no  necessity  of  sacrificing  any 
large  part  of  his  profits.  Sooner  than  do  so,  he  will  be  his  own 
trader,  and  deal  directly  with  his  customers. 

Commerce  between  persons  in  neighborhood  is  also  a  com- 
merce of  swift  returns.  The  capital  employed  circulates  much 
more  rapidly,  and  accomplishes  a  much  larger  amount  of  service 
in  proportion  to  its  amount.  Instead  of  considerable  amounts 
of  it  being  thrown  out  of  possible  use,  because  in  transit  between 
distant  points,  the  whole  is  directly  and  immediately  available ; 
as  soon  as  the  manufactured  goods  have  left  the  factory,  they  are 
ready  for  purchasers.  As  soon  as  the  flour  has  left  the  mill,  it 
is  available  for  human  food.  The  waste  of  time  involved  in 
more  distant  commerce  is  totally  avoided  or  reduced  to  a 
minimum. 

§  193.  Commerce  between  persons  in  neighborhood  leaves 
little  opening  for  those  traders'  speculations  by  which  artificial 
scarcity  is  produced.  Commerce  between  distant  points  involves 
the  passage  of  large  quantities  of  goods  through  single  ports  of 
entry  and  exit,  on  their  way  from  the  field  of  their  production 
to  that  of  their  consumption.  As  they  change  hands  at  this 
point  from  one  trader  to  another,  their  price  to  their  final  pur- 


200  ELEMENTS    OF    POLITICAL    ECONOMY. 

chaser  is  mainly  fixed.  If  a  number  of  traders  foresee  a  slight 
scarcity  of  supply,  it  is  not  unusual  for  them  to  club  resources,  buy 
up  all  that  they  can  lay  their  hands  on,  and  hold  it  for  an  advance. 
Unless  some  unforeseen  circumstance  defeat  their  plans,  they  are 
thus  enabled  to  put  into  their  pocket  large  sums,  which  repre- 
sent simply  no  service  rendered  to  society, — no  benefit  to  either 
producer  or  consumer.  Thus  in  the  grain-trade,  which  centres 
so  largely  in  Chicago,  traders  have  repeatedly  brought  about  a 
scarcity  of  this  sort,  and  raised  the  price  of  flour  to  the  Eastern 
and  European  consumer.  Were  the  wheat-crop  of  the  whole 
country,  like  that  of  Pennsylvania,  consumed  in  the  vicinity  of 
the  farms,  "  such  corners  in  wheat,"  as  they  are  called,  would 
be  impossible.  Very  diiFcrent  is  the  desert  of  those,  who,  fore- 
seeing an  enormous  scarcity,  buy  up  the  present  supply  and 
hold  it  over  till  the  scarcity  occurs,  or  buy  up  in  one  district  to 
sell  in  another.  They  diminish  the  present  consumption  and 
enforce  economy  of  resources ;  they  spread  the  dearness  over  a 
larger  space  and  time,  and  thus  prevent  scarcity  from  becoming 
real  famine  by  making  the  supply  go  as  far  as  possible.  What- 
ever the  motive,  a  real  service  is  rendered  in  this  case. 

This  production  of  artificial  scarcity  is  not  an  exceptional  or 
difficult  thing  when  the  producer  and  consumer  are  at  a  distance 
from  each  other.  When  California  was  quite  a  young  state,  and 
depended  almost  entirely  upon  the  Atlantic  States  and  Europe 
for  all  supplies,  the  prices  of  all  importations  were  kept  enor- 
mously high  by  forestalling  the  San  Francisco  market.  "  It  is 
a  frequent  occurrence  that  a  few  wealthy  men  combine  together 
to  buy  up  all  of  a  certain  kind  of  merchandise  and  then  control 
the  price."  In  Australia  (§  274),  especially  during  the  time 
when  the  country  was  dependent  upon  England  for  nearly  all 
sorts  of  goods,  the  same  system  was  "  carried  on  in  the  most 
systematic  manner  "  and  has  not  ceased  yet. 

See  Restrictions  on   Trade,  from-  a  Colonial  Flint  of  View,  by  David 
Syme  (republished  from  the  Fortnightly  Revieio),  Boston,  1872. 

§  194.   These  facts  are  only  extreme  instances  of  the  power 
of  the  trader  to  dictate  his  own  terms,  when  the  producer  has  to 


ARTIFICIAL   DEARNESS   AND   CHEAPNESS.  201 

Bend  his  wares  to  a  distant  market.  These  conspiracies  are  but 
the  extreme  form  of  the  general  understanding  that  grows  up 
between  the  body  of  capitalists,  when  the  chief  supply  of  an 
article  is  concentrated  within  a  limited  area  and  in  a  small  num- 
ber of  hands.  Such  an  understanding,  easily  reached  in  such 
circumstances,  will,  unless  checked  by  some  other  competition, 
enhance  the  price  of  goods  quietly  and  by  degrees  that  escape 
notice,  but  are  none  the  less  burdens  upon  the  producers  and 
the  consumers.  The  traders  can  "fix  their  own  prices"  in  such 
cases. 

The  same  power  of  the  trader  over  the  prices  that  rule  in  a 
distant  market  is  sometimes  displayed  in  producing  an  artificial 
but  temporary  cheapness,  to  be  followed  by  such  a  rise  of  prices 
as  will  recoup  him  for  the  loss.  Where  the  consumers  of  an 
article  make  an  efi'ort  to  dispense  with  his  services  and  those  of 
its  distant  producer,  by  developing  resources  for  its  supply  that 
are  nearer  at  hand,  he  not  seldom  finds  it  worth  while  to  offer 
large  quantities  at  less  than  cost  price.  He  shares  this  sacrifice 
with  the  producer  of  what  he  sells,  and  both  have  the  intention 
to  hold  fast  the  market,  and  retrieve  their  present  losses  by 
larger  future  gains.  The  effect  is  to  force  the  new  producer  of 
the  same  article  to  cease  operations,  "  unless  he  have  a  very  strong 
back  indeed,"  and  can  afford  to  go  as  far  in  making  sacrifices  as 
his  longer-established  rivals.  As  this  is  very  rarely  the  case  in  the 
first  stages  of  an  enterprise,  there  is  no  choice  but  to  cease  pro- 
ducing, and  the  market  is  left  dependent  upon  the  trader  and 
his  partner,  the  distant  producer,  although  every  facility  existed 
for  producing  the  article  more  cheaply  and  abundantly  at  home. 

See  ?^  252  and  284.  Coleridge  says:  (VI.  511)  "It  has  already  been 
shown,  in  evidence  which  is  before  all  the  world,  that  some  o£oar  manu- 
facturers have  acted  upon  the  accursed  principle  of  deliberately  injuring 
foreign  manufacturers  if  they  can,  even  to  the  ultimate  disgrace  of  the 
country  and  loss  to  themselves." 

§  195.  Even  as  regards  domestic  commerce,  there  ia  large 
epace  for  reform  in  the  diminution  of  the  number  and  the  profits 
of  the  middlemen,  who  stand  between  producer  and  consumer. 
**  Any  one  who  inquires,"  says  Mr.  Mill,  "  into  the  amount  that 


202  ELEMENTS   OP   POLITICAL   ECONOMY. 

reaches  the  hands  of  those  who  made  the  things  he  buys  will 
often  be  aHtopished  at  its  smallness."  This  bears  especially 
hard  on  the  working  classes ;  it  deprives  them  as  producers  of 
the  benefit  of  market  rates  for  their  workmanship.  It  taxes  them 
more  heavily  as  consumers  than  it  does  the  rich  who  can  afford 
to  buy  at  wholesale.  He  needs  most  to  economize,  yet  he  pays 
the  highest  prices,  a  fact  that  does  much  to  counteract  the 
natural  tendency  towards  an  equality  of  condition ;  as  Solomon 
said,  "  The  destruction  of  the  poor  is  their  poverty."  The 
earlier  English  economists  regarded  free  competition  as  a  suffi- 
cient corrective  of  this;  if  profits  were  excessive,  more  capital 
would  flow  into  the  trade,  and  the  competition  for  custom  would 
bring  prices  down.  But  while  this  has  had  its  efi'ects,  it  is  by 
no  means  sufficient,  especially  in  small  communities ;  trades 
tend  to  become  informal  associations  to  keep  prices  up  to  a  cus- 
tomary standard  of  profits,  which  in  England  averages  about 
fifty  per  cent,  of  the  wholesale  price. 

Cooperative  stores  are  a  means  of  obviating  this  difficulty,  from 
which  great  things  are  expected,  and  perhaps  justly.  In  these 
the  consumers  associate  to  establish  a  retail  store  by  their  joint 
contributions,  and  employ  competent  persons  or  some  central 
agency  to  purchase  the  goods  in  large  quantities  and  at  the 
lowest  wholesale  price,  as  well  as  of  the  best  quality.  These  are 
retailed  for  cash  at  a  margin  of  profit  that  more  than  covers  the 
cost  of  the  operations,  and  the  net  profits  are  distributed  at  the 
end  of  the  year  in  proportion  either  to  purchases  made  or  to 
stock  held.  Some  of  these  stores  sell  only  to  their  stockholders  ; 
others  sell  to  accepted  customers,  and  give  these  a  small  share 
in  the  joint  profits  proportional  to  their  purchases ;  others  sell 
to  the  public  at  large,  and  distribute  the  profits  among  stock- 
holders only.  In  the  third  method  (and  in  the  second,  in  a  less 
degree)  the  cooperative  basis  of  their  operations  is  given  up ; 
the  establiishment  becomes  merely  a  joint  stock  company  to  deal 
in  a  certain  class  of  goods,  and  the  ordinary  dealers'  motive  to 
overcharge  or  adulterate  goods  comes  into  play.  These  stores 
originated  with  the  Owenist  party  in  England  about  1830 ;  they 


COMMERCIAL   CREDITS.  20? 

exist  in  great  numbers  in  that  country,  in  France  and  in 
Germany,  where  Schultze-Delitzsch  has  greatly  promoted  their 
estjiblishment.  Some  look  to  them  for  a  complete  revolution  of 
the  retail  trade  and  the  abolition  of  the  retail  trader.  But  the 
destruction  of  any  function  in  the  organization  of  society  would 
be  a  retrograde  step.  The  chief  service  that  these  stores  can 
render  is  in  restraining  the  trader  from  adulteration,  and  in 
forcing  down  prices  to  a  just  rate;  in  substituting  cash  payments 
for  book-credits,  and  perhaps  in  finally  leading*  him  to  take  his 
customers  into  partnership  by  dividing  among  them  a  share  of 
his  annual  profits. 

§  196.  Another  questionable  feature  of  modern  commerce  is 
its  transaction  of  business  on  credit,  or  "  on  time,''  as  it  is  called. 
The  buyer  of  a  quantity  of  goods  does  not  pay  for  them  in 
ready  money  of  any  kind,  but  gives  his  note  payable  in  thirty, 
sixty  or  ninety  days,  which  the  seller  can  only  convert  into 
available  money  by  having  it  discounted  at  the  bank.  If  the 
buyer  does  not  pay  the  note  at  the  date  specified,  the  seller  has 
to  pay  it  himself,  and  put  the  amount  into  his  list  of  bad  debts, 
unless  the  law  gives  him  redress  by  a  levy  on  the  property  of 
the  buyer. 

(As  we  have  already  said,  this  method  of  creating  the  credit- 
fund  of  money  of  account  on  the  books  of  the  bank  might  be 
abolished  without  abolishing  the  credit-fund  itself,  and  the 
separation  of  the  two — of  our  money  of  account  from  our  dis- 
count system — is  one  of  the  problems  that  greatly  concern  the 
future  of  modern  business.) 

Now,  of  course,  the  seller  cannot  afford  to  put  the  goods  at  as 
low  a  figure  as  if  he  were  paid  in  cash.  He  even  in  some  cases 
designates  different  prices  according  to  the  length  of  the  credit; 
in  other  cases,  each  house  or  each  trade  sells  on  time  for  a  fixed 
number  of  days.  And  the  difference  is  not  merely  the  amount 
that  he  will  lose  by  the  discount  of  the  note.  He  has  to  insure 
himself  against  bad  debts  by  an  increase  of  his  profits  on  all 
transactions.  He  must  charge  more  to  good  customers  in  order 
to  insure  himself  against  bad  ones.     This  has  a  tendency  to 


204  ELEMENTS   OF   POLITICAL   ECONOMY. 

ibrce  up  all  prices,  and  to  increase  the  value  of  the  goods  in 
their  passage  from  producer  to  consumer  without  adding  to  their 
utility. 

A  transition  to  buying  and  selling  for  cash  would  greatly 
simplify  business.  It  would  separate  transactions  that  ought  to 
be  treated  distinctly  and  each  on  its  own  merits.  It  would  rid 
good  houses  of  the  burden  of  this  mutual  insurance  system, 
through  which  they  suffer  for  the  instability  of  others.  It 
would  separate  the  business  of  borrowing  money  at  the  bank 
from  the  business  of  buying  and  selling,  and  make  '^  every  tub 
stand  on  its  own  bottom."  It  would  send  every  man  to  bank  to 
borrow  money  on  his  own  security,  or  that  of  his  neighbors  who 
know  something  of  his  affairs,  instead  of  enabling  him  to  borrow 
there  on  the  credit  of  those  from  whom  he  buys. 

§  197.  Whether  and  how  far  the  change  would  be  effectual 
in  restraining  the  spirit  of  reckless  adventure  and  speculation, 
without  impeding  legitimate  enterprise,  is  a  more  difficult  ques- 
tion. It  would  at  least  bring  distinctly  into  view  the  question 
of  the  sufficiency  of  every  person  to  whom  an  advance  is  made, 
without  complicating  it  with  the  desire  to  make  a  sale  to  him. 
And  this  question  would  come  before  experts,  whose  business  it 
would  be  to  make  themselves  acquainted  with  the  facts,  instead 
of  business  men  who  have  hands  and  heads  full  of  other  matters. 
As  a  rule  it  would  come  before  a  man's  own  neighbors  and 
acquaintances,  the  directors  of  some  local  bank,  instead  of  being 
settled  in  a  city  where  the  statements  of  a  "  Commercial  Direc- 
tory" or  some  similar  institution,  are  the  only  data  for  proceed- 
ing. If  joint  guarantee  were  required  it  would  have  to  be 
furnished  as  in  Scotland  by  two  or  more  responsible  neighbors, 
who  would  need  to  know  something  of  his  standing  before  they 
risked  what  would  be  a  large  loss  to  them,  while  it  might  be  in 
comparison  a  small  loss  to  the  wholesale  firm  in  the  city. 

A  great  change  for  the  better  in  this  regard  has  been  effected 
since  the  war.  Six  months'  credit  has  been  generally  shortened 
to  thirty  or  sixty  days.  The  possession  of  a  trustworthy  me- 
dium of  exchange,  of  bank-notes  that  circulate  throughout  the 


THEORY  OF  INTERNATIONAL  EXCUANGES.     205 

whole  country,  and  that  with  a  new  rapidity,  has  done  much 
good  in  this  respect.  The  loss  of  a  multitude  of  bad  debts,  and 
the  consequent  decline  of  confidence  in  distant  customers,  have 
done  more.  But  there  is  still  great  need  of  improvement  and 
perhaps  of  the  abolition  of  sales  on  time.  For  instance,  one  of 
our  largest  dry  goods  houses  made  a  thorough  overhauling  of  its 
list  of  debtors  during  the  panic  of  1873,  and  found  that  it  knew 
simply  nothing  of  its  prospect  of  ever  getting  any  money  from 
nearly  a  third  of  them. 

§  198.  When  we  know  the  function  of  the  trader,  and  the  part 
he  has  played  in  industrial  history,  we  are  better  able  to  decide 
between  the  comparative  benefits  of  home  and  foreign  commerce. 
The  question  is  not  of  merely  theoretical  interest ;  upon  the 
answer  generally  accepted  as  correct  must  depend  the  public 
policy  of  each  nation,  for  the  revenue  system  of  every  country 
has  its  effect  to  encourage  or  discourage  one  or  both. 

Adam  Smith  and  Jean  Baptiste  Say,  the  founders  of  the  mod- 
ern school  of  economists  in  England  and  France,  pronounce  in 
favor  of  domestic  commerce  as  the  more  profitable  of  the  two. 
Smith  says  that  if  a  given  amount  of  capital  be  employed  in 
purchasing  and  interchanging  goods  within  the  same  country, 
that  country  will  reap  twice  as  much  advantage  from  the  activ- 
ity of  that  capital,  as  if  it  had  been  employed  in  purchasing  and 
interchanging  an  equal  value  of  goods  with  another  country. 
For  in  the  one  case  encouragement  is  given  to  only  one  native 
industry ;  in  the  other  to  two.  Nay  more, — the  operations  of 
domestic  commerce  being  far  swifter  than  those  of  foreign  trade, 
the  advantage  to  the  country  is  proportionally  great.  In  his 
day  it  was  possible  to  effect  twelve  such  exchanges  at  home  for 
one  abroad,  making  capital  employed  in  the  former  twenty-four 
times  as  useful  to  the  country  as  if  it  were  engaged  in  foreign 
trade.  (With  modern  facilities  for  transport,  this  ratio  would 
of  course  be  very  much  decreased.)  In  his  view  the  amount  of 
employment  that  a  country  can  furnish  to  her  people,  depends 
upon  the  amount  of  capital  in  circulation ;  so  that  a  pound  em- 
ployed in  the  purchase  of  British  carpets  for  sale  in  the  home 


206  ELEMENTS   OF    POLITICAL   ECONOMY. 

market  might  furnish  twenty-four  times  as  much  work  to 
English  workmen  as  a  pound  employed  in  trading  with  Portugal 
for  wines.  A  trade,  therefore,  by  which  the  merchant  grows  rich 
may  be  one  from  which  his  country  derives  no  corresponding 
advantage.  In  asserting  so  much,  Adam  Smith  certainly  yielded 
the  fundamental  principle  of  his  whole  system,  which  was  that 
if  society  will  simply  remove  all  restrictions  from  individual 
enterprise,  and  allow  every  one  to  do  with  his  own  what  he  will 
— what  he  finds  pays  him  best — society  will  reap  the  largest 
possible  benefit. 

§  199.  The  English  school  of  course  enter  protest  against 
this  concession,  and  try  to  refute  the  reasoning  on  which  it  is 
based.  Ricardo  and  McCulloch  give  substantially  the  same 
answer.  They  assume  in  their  answer  that  goods  must  be  paid 
for  in  goods ;  that  if  England  and  Scotland  give  up  a  certain 
commerce  with  each  other,  because  the  one  can  better  supply 
itself  from  one  foreign  country,  and  the  other  from  another, 
those  countries  will  begin  to  purchase  the  products  of  English 
and  Scottish  labor  to  the  same  amounts,  and  nobody  will  be 
thrown  out  of  employment  in  either  country  by  the  cessation  of 
the  domestic  exchange.  Now  this  assumption,  which  they  do 
not  put  in  so  many  words,  but  leave  to  be  implied,  is  not  to  be 
conceded  without  evidence.  Rather  there  is  much  evidence  to 
the  contrary.  England  and  China  have  a  large  mutual  foreign 
commerce,  but,  in  spite  of  the  Christian  forcing  the  pagan  to 
allow  the  importation  of  opium,  millions  upon  millions  of  Eng- 
lish silver  are  absorbed  every  year  by  the  Chinese,  in  payment 
for  teas  and  silks,  which  are  not  paid  for  in  English  goods.  So 
also  India  absorbs  yearly  millions  of  silver  coin  in  payment  for 
her  native  goods,  all  that  she  takes  from  England  being  insuffi- 
cient to  pay  for  what  England  buys  of  her.  The  trade  between 
our  own  country  and  Europe  is  after  the  sa^iie  fashion.  England 
and  the  Continent  do  not  "  call  it  square"  at  the  end  of  every 
year,  balancing  our  raw  cotton  and  breadstuiFs  against  dry  goods 
and  hardware.  We  pay  over  millions  upon  millions  of  gold  and 
silver  to  balance  our  accounts.     Europe  takes  no  more  of  what 


GOLD   AS   A   COMMODITY.  207 

we  have  to  sell  than  she  raust ;  she  sells  us  all  she  can.  For 
us,  therefore,  these  attempted  refutations  of  Smith  have  no 
force,  and  unless  some  better  be  given,  we  must  concede  his 
position  thit  American  capital,  if  spent  in  encouraging  the  pro- 
duction of  some  of  those  articles  that  wo  pay  Europe  gold  and 
silver  for,  would  confer  greater  benefits  on  the  country  than  if 
spent  in  importing  them.  The  second  part  of  his  argument — 
that  from  the  comparative  rapidity  of  the  two  forms  of  com- 
merce— Ricardo  and  McCulloch  do  not  touch. 

§200.  "  But  after  all,  even  when  the  balance  is  paid  in  gold 
and  silver,  still  the  fact  is  that  the  exchange  is  of  commodities 
for  commodities.  For  in  that  case  gold  and  silver  are  them- 
selves given  in  exchange  as  commodities,  not  as  money.  And 
it  is  in  this  new  capacity  alone  that  they  are  productive;  in  all 
other  cases  they  merely  facilitate  interchanges  of  parts  of  the 
national  wealth  ;  but  when  exported  as  commodities,  they  pro- 
cure in  return  other  commodities  that  add  to  the  aggregate  of 
that  wealth."    So  J.  B.  Say  argues. 

Under  this  reasoning  lies  the  notion  of  the  passivity  of 
money, — that  it  plays  no  part  in  production,  but  only  in 
exchange ;  that  any  increase  of  the  amount  of  it  in  circulation, 
only  increases  in  that  proportion  the  money  price  of  other  com- 
modities ;  that  any  decrease  in  that  amount  only  diminishes  the 
price.  This  notion  runs  counter  to  the  observed  facts  in  the 
history  of  money,  as  recorded  by  Humboldt  and  Arthur  Young, 
for  the  last  four  centuries,  and  by  Thomas  Tooke  {Histori/  of 
Prices),  for  the  present  century.  A  tendency  to  decline  in  the 
purchasing  power  of  money  with  the  increase  of  its  amount,  is 
indeed  a  very  natural  supposition  ;  no  doubt,  in  an  unprogressivo 
society,  such  would  be  and  has  been  the  effect,  as  has  been  shown 
by  the  vast  decline  in  the  purchasing  power  of  silver  in  India, 
since  the  English  began  to  trade  with  her  people.  But  a  pro- 
gressive society  is  one  that  resists  such  natural  tendencies  j  an 
influx  of  the  instrument  of  association  into  such  a  country,  tends 
to  stimulate  all  sorts  of  productive  industry.  It  finds — except 
in  periods  of  financial  depression — a  host  of  persons  waiting  for 


208  ELEMENTS   OF   POLITICAL   ECONOMY. 

this  very  instrument,  to  begin  new  lines  of  production,  and  it 
sets  many  new  wheels  moving.  "  Hence  new  uses  will  be  found 
for  it  when  it  is  abundant,  new  avenues  of  commerce  will  be 
opened,  new  branches  of  industry  will  be  essayed,  until  in- 
creased production  finds  employment  for  the  increase  of  money. 
If  money  has  increased,  industry  and  trade  are  increased ;  and 
thus  the  tendency  to  depreciation  is  met  and  strongly  counter- 
acted." 

See   Stephen    Colwell's  Ways   and   Means  of  Payment  (Phila.  1859), 
p.  556. 

§  201.  The  drain  of  the  precious  metals  from  a  country, 
though  its  effects  are  alleviated  by  the  creation  of  the  credit 
fund  for  domestic  payments,  is  therefore  decidedly  injurious  to 
its  general  interests.  ''It  is  not  exactly  true  to  say,  as  has  too 
often  been  said  over  and  over  again,  since  Turgot  first  said  it, 
that  money  is  a  commodity  like  any  other.  That  proposition  is 
untrue,  except  as  it  regards  the  metal  of  which  money  is  made ; 
but  in  so  far  as  it  is  the  means  of  exchange,  it  has  peculiarities 
of  its  own,  which  clearly  distinguish  it  from  other  commodities. 
If  iron  and  cotton  are  scarce,  those  who  need  them  suffer  by 
the  scarcity,  but  it  has  no  effect  upon  the  prices  of  other  ma- 
terials. If,  on  the  other  hand,  money  is  scarce,  the  price  of 
everything  else  is  affected.  Every  one  must  make  exchanges, 
must  buy  and  sell ;  if,  therefore,  there  is  a  tendency  to  a  defi- 
ciency or  a  scarcity  of  the  means  of  exchange,  every  one  is 
straitened,  and  all  transactions  become  difficult.  Just  as 
when  the  water  falls  in  its  rivers,  traffic  is  interrupted  because 
the  vessels  are  aground ;  so,  when  money  is  diminished  or  dis- 
appears from  the  channels  of  circulation,  articles  pass  from  one 
owner  to  another  with  great  difficulty.  We  have  got  to  the 
point  of  dispensing,  in  the  commercial  transactions  of  advanced 
countries,  with  a  great  quantity  of  money  by  replacing  it  by 
credit  in  all  its  forms  ;  but,  given  the  quantity  of  money  that  is 
still  necessary,  its  rarity  produces  an  embarrassment,  and  some- 
times even  a  general  crisis." 

See  Le  Ma-'che  Monilaire  et  sea  Crises  depiiis  Cinquante  Ans;  by  Emile 
do  La/elcyo  (1865). 


MONEY   STIMULATES   PRODUCTION.  209 

The  possession  of  a  large  quantity  of  money  is,  within  limits 
that  no  progressive  country  has  reached,  a  great  advantage.  It 
enables  any  country  to  organize  its  "industry  upon  such  a  scale, 
and  to  carry  its  division  of  labor  to  such  perfection,  as  will  bring 
down  the  price  of  all  the  products  of  industry,  while  affording  a 
large  return  to  both  the  capitalist  and  the  laborer.  It  therefore 
makes  such  a  country  a  cheap  place  to  buy  in,  mainly  because 
of  that  accumulation  of  money,  which  was  to  make  everything 
dear.  And  if  any  country  have  got  the  lead  in  this  respect,  an 
unrestricted  trade  with  those  that  are  not  so  well  oflF  for  money 
will  not  correct  but  only  increase  the  inequality.  It  will  con- 
tinually drain  the  precious  metals  out  of  those  countries  to 
increase  its  own  store,  because  it  will  steadily  keep  the  balance 
of  trade  in  its  own  favor.  It  will  sell  others  what  it  pleases, 
and  buy  of  them  what  it  must.  If  there  are  exceptions  to  this 
rule,  they  are  to  be  found  in  those  unprogressive  countries,  in 
which  the  wants  of  the  people  are  so  few  that  it  is  impossible, 
after  selling  them  everything  that  they  will  buy,  to  balance  the 
purchases  of  raw  materials  from  them.  Such  countries  are 
India  and  China. 

This  truth  is  the  germ  of  the  theories  of  the  Mercantile 
school ;  it  is  a  doctrine  ''  combated  by  the  great  majority  of 
economists,"  who  travesty  the  principles  of  that  school  as  if  men 
like  Colbert,  Locke  and  Steuart  held  that  one  could  eat  or  wear 
money.  But  these  same  economists,  proclaiming  the  passivity 
or  barrenness  of  money,  save  when  given  in  exchange  for 
foreign  goods,  would  have  us  believe  that  those  countries  which 
receive  it  in  that  exchange  are  so  grandly  generous,  or  so  blind 
to  their  own  interests,  as  to  give  commodities  of  the  highest 
utility  for  one  that  has  no  utility,  or  that  only  possesses  it  when 
it  can  again  be  sent  abroad. 

202.  The  theory  of  foreign  exchanges  now  maintained  by  the 
English  school,  and  first  enunciated  by  Torrens  (1808)  and 
Ricardo  (1817),  is  given  in  a  very  forcible  form  by  Mr.  J.  S. 
Mill.  It  bases  the  advantage  of  the  foreign  rade  exclusively 
upon  the  comparative  productiveness  of  labor,  or  of  different 
14 


210  ELEMENTS    OF    POLITICAL   ECONOMY. 

kinds  of  labor,  in  different  countries.  Each  country  exchangea 
with  others  goods  that  cost  it  less  labor  than  those  that  it  re- 
ceives would  have  cost  it  if  produced  at  home.  Each  save? 
labor  by  the  bargain,  and  therefore  each  derives  benefit  from  the 
exchange,  even  though  it  might  have  produced  the  same  articles 
at  home  for  less  labor  than  they  cost  the  other.  For  even  if  it 
be  as  easy  to  make  iron  in  Pennsylvania  as  in  England,  yet  if  it 
pay  better  to  raise  wheat  for  exportation  because  England's  need 
of  wheat  compels  her  to  give  more  iron  for  our  wheat  than  the 
labor  spent  in  raising  wheat  would  have  produced,  we  are  gainers 
by  the  exchange.  Each  country,  therefore,  should  manage  its 
economy  not  on  the  lines  indicated  by  its  natural  resources,  but 
on  those  that  are  indicated  by  the  exchangeable  value  of  its 
products  in  the  markets  of  the  world.  Every  nation,  therefore, 
Mill  says,  instead  of  adopting  a  national  policy  that  looks  to  the 
development  of  any  species  of  industry,  should  allow  things  to 
take  their  natural  course,  being  assured  that  to  do  the  things 
that  are  easiest,  and  to  buy  in  the  cheapest  market  and  sell  in 
the  dearest,  are  the  most  remunerative  ways  of  procedure. 

§  203.  We  have  already  given  some  reasons  why  commerce 
between  distant  points  is  an  undesirable  thing,  as  open  to  the 
exercise  of  tyrannizing  power  by  traders  and  their  combinations. 
The  next  chapter  will  be  chiefly  devoted  to  showing  that  while 
individuals  may  find  it  to  their  account  to  buy  in  the  cheapest 
market  and  sell  in  the  dearest  of  those  that  already  exist,  com- 
munities will  frequently  find  it  more  to  their  account  to  create 
new  markets  by  cherishing  a  varied  industry  at  home.  At  this 
point,  therefore,  we  shall  only  remark  : 

(1)  That  exchanges  are  not,  as  this  theory  assumes,  effected 
on  the  basis  of  labor  expended,  but  of  money  price,  which  is 
quite  another  matter.  We  might  be  able  to  produce  iron  at  a 
far  less  expenditure  of  labor  in  Pennsylvania  than  in  England, 
and  yet  not  be  able  to  sell  it  so  cheap  in  the  world's  markets 
as  England  does.  Some  of  the  manufactures  of  iron,  such  as 
cutlery,  axes  and  saws,  are  actually  so  produced  through  the 
possession  of  better  machinery,  but  they  have  not  yet  driven 


THE   ECONOMY  OF   LABOR.  211 

English  wares  of  the  same  sort  out  of  the  market.  A  recent 
report  to  the  British  government  asserts  the  same  of  many  forms 
of  American  dry  goods,  yet  they  do  not  sell  in  Europe.  "  What 
makes  the  difTcrcnco  in  money  cost  ?"  Many  things,  —the  ex- 
tent and  the  method  of  taxation,  the  cost  of  capital,  the  rate 
of  wages,  the  difference  in  the  purchasing  power  of  money,  and 
the  like. 

Now,  in  view  of  domestic  commerce,  these  elements  of  differ- 
ence have  no  existence.  It  makes  no  difference  to  a  country 
what  is  paid  for  an  article  of  home  production,  provided  there  is 
no  waste  of  labor  in  producing  it,  and  provided  there  is  a  fair 
exchange  of  labor  for  labor.  If  tailor  and  hatter  make  an 
exchange  of  goods,  whether  they  call  the  price  a  thousand 
dollars  or  one,  is  of  no  importance  if  only  the  values  exchanged 
are  equal.  The  standard  of  money  payment,  be  it  high  or  low, 
is  the  same  for  both. 

§  204.  (2)  The  theory  assumes  that  the  chief  end  of  national 
as  of  individual  economy  is  to  save  labor,  whereas  the  great 
problem  is  how  to  employ  it  productively.  If  buying  in  the 
cheapest  market  reduce  the  amount  of  employment,  it  will  be 
for  the  nation  that  does  it  the  dearest  of  all  buying.  A  farmer 
who  spends  his  idle  hours  in  making  a  sled  might  have  got  one 
at  the  factory  for  the  price  of  wheat  that  cost  him  less  labor ; 
but  he  may  have  been  wiser  in  making  than  in  buying,  because 
those  idle  hours  would  otherwise  have  been  wasted.  The  nation 
that  spends  its  surplus  labor, — and  every  nation  has  a  surplus 
of  it, — in  working  up  its  raw  material  into  goods  is  gaining  by 
the  business,  even  though  it  may  employ  that  labor  less  effect- 
ively than  another  that  has  more  experience  and  capital.  The 
people  of  Denmark  spend  their  long  and  bleak  winters  in  spin- 
ning and  weaving  home-made  goods  that  England  would  furnish 
them  cheaper  than  they  make  them.  The  nation  says,  with  one 
consent,  through  its  national  government,  "  we  will  not  buy  of 
you  what  we  can  make  ourselves,  for  if  we  did  our  time  would 
be  lost."  England  herself  is  an  illustration  of  what  we  mean. 
*'  If  3very  man  and  woman  and  child  returned  as  a  worker  in 


212  ELEMENTS    OF    POLITICAL    ECONOMY. 

the  census  had  full  employment,  at  full  wages,  for  forty-eight 
weeks  out  of  the  fifty-two,  England  would  be  a  perfect  Paradise 
for  workingmen.  We  should  be  in  the  Millennium  !  Far  other 
is  the  real  state  of  affairs.  Taking  all  the  facts  into  account,  I 
come  to  the  conclusion  that  for  loss  of  work  from  every  cause, 
and  for  the  non-effectives  up  to  sixty-five  years  of  age,  who  are 
included  in  the  census,  we  ought  to  deduct  fully  twenty  per 
cent,  from  the  nominal  full-time  wages  "  of  the  lower  classes  a8 
a  whole. 

See  R.  Dudley  Baxter's  National  Income  of  the  United  Kingdom.  (Lon- 
don 1868.) 

The  problem  thus  presented  is  not  an  insoluble  one  for  any 
country.  It  is  the  problem  of  the  due  balance  of  the  three  great 
elements  of  the  industrial  state.  England  has  missed  its  solution 
chiefly  through  the  rending  the  people  away  from  the  land,  the 
establishment  of  a  system  of  agriculture  which  lacks  aggressive- 
ness and  full  productive  power,  and  her  consequent  dependence 
upon  foreign  harvests.  Millions  of  the  English  people  who 
should  be  living  by  the  land  and  owning  it,  sit  prisoners  in  Eng- 
lish workhouses,  or  crowd  the  lanes  and  back  streets  of  her 
manufacturing  towns.  Our  danger  is  in  the  other  direction — 
an  undue  development  of  agriculture  and  foreign  trade  to  the 
neglect  of  varied  industry. 

§  205.  (3)  In  adopting,  therefore,  a  purely  passive  policy,  we 
should  not  be  accepting  the  natural  order  of  things,  but  accom- 
modating ourselves  to  a  thoroughly  artificial  order.  The  false 
position  in  which  England  finds  herself  compels  her  to  wage  war 
upon  the  industries  of  other  countries;  for  us  to  sit  idle  and 
passive  while  she  does  so  by  means  of  the  vast  masses  of  capital 
concentrated  in  the  hands  of  a  few  capitalists,  would  be  as  weak 
as  to  sit  idle  and  passive  while  her  fleet  bombarded  Boston  or 
New  York.  The  English  ideal — forced  upon  them  by  their  posi- 
tion— is  that  their  country  should  be  "the  workshop  of  the 
world"  and  all  other  countries  her  dependencies.  She  is,  in  their 
view,  "like  a  vast  city  to  which  the  less  peopled  parts  of  the 
civilized  world  are  an  agricultural  country,  w^hich  is  glad  to  send 


ENGLAND'S   IDEAL   OF   COMMERCE.  213 

its  overplus  of  provisions  [of  raw  materials]  in  exchange  for  the 
luxuries  and  conveniences  of  a  manufacturing  region"  (Thorold 
Rogers).  "  England's  position  is  not  that  of  a  great  landed  pro- 
prietor, with  an  assured  revenue,  and  only  subject  to  occasional 
loss  of  crops  or  hostile  depredations.  It  is  that  of  a  great  mer- 
chant, who  by  immense  skill  and  capital  has  gained  the  front 
rank  and  developed  an  enormous  commerce,  but  has  to  support 
an  ever-iucrea«ing  host  of  dependants.  He  has  to  encounter 
the  risks  of  trade  and  to  face  jealous  rivals.  .  .  .  England  is 
more  favorably  situated  than  any  country,  except  the  United 
States,  for  manufactures  and  commerce.  .  .  .  The  future  rise 
of  the  United  States  into  a  great  manufacturing  and  naval 
power,  appears  the  most  probable  and  certain  cause  which  will 
place  a  limit  to  our  national  increased  prosperity"  (Dudley 
Baxter).  The  United  States  and  British  colonies ''are  young 
and  rising  countries;  industries,  as  yet  nascent,  are  thoroughly 
suited  to  the  natural  capacity  of  the  region  and  of  the  people, 
the  latter  being  of  the  same  stock  as  the  mother  country,  whose 
manufactures  they  prohibit  or  discourage.  There  is  no  reason, 
apparently,  except  priority  in  the  market,  why  the  industry  of 
the  old  country  should  not  be  transplanted  to  the  new"  (Tho- 
rold Rogers). 

In  other  words,  England  having  by  a  bad  national  economy 
destroyed  the  equilibrium  of  agriculture  and  manufactures  at 
home,  and  thereby  made  herself  dependent  upon  other  peoples  for 
the  supply  of  food  and  a  market  for  her  wares,  must  now  do  her  best 
to  prevent  these  new  countries  from  attaining  that  equilibrium. 
If  they  attain  it,  that  will  "  place  a  limit  to  her  increase  and 
prosperity,"  and  unless  emigration  surpass  everything  that  the 
world  has  seen,  will  produce  first  wide-spread  misery  and  then 
domestic  chaos.  She  must,  therefore,  use  all  her  powers  of 
capital  and  persuasion  to  keep  oflf  the  evil  day.  Although  she 
professes  to  believe,  and  persuades  herself  that  she  believes,  in 
the  solidarity  of  interests,  and  exhorts  men 

Froai  growing  commerce  loose  the  latest  chain, 

.  .  .  Till  eaoli  man  finds  his  own  in  all  men's  good, 

And  all  men  work  in  noble  brotherhood  ; 


214  ELEMENTS   OF    POLITICAL   ECONOMY. 

yet  she  cannot  but  see  in  this  national  growth  of  the  industry 
of  these  new  peoples  an  injury  to  her  own  well-being.  All 
English  arguments  and  exhortations  to  passivity,  however  sin- 
cere, lie,  therefore,  under  a  just  suspicion,  as  special  pleadings, 
Facile  hoTnines  credunt,  id  quod  volunt. 

§  206.  (4)  The  commerce  proposed  by  this  theory  is  the 
exchange  of  the  raw  materials  of  some  countries  for  the  manu- 
factured productions  of  others.  It  is  therefore  an  unfair  ex- 
change, [1]  one  side  pays  for  the  transportation  of  bulky  and 
costly  articles  over  great  distances;  the  other  pays  for  the' 
transfer  of  goods  of  the  same  value  but  condensed  in  form. 
The  burden  of  transportation,  the  chief  tax  upon  production, 
falls  therefore  heavily  upon  the  producer  of  raw  material, 
lightly  upon  the  manufacturer  who  exchanges  with  him.  But 
as  long  as  comparative  cheapness  is  the  one  test  by  which  an  in- 
dustry must  stand  or  fall,  the  producer  has  no  redress.  He  can- 
not say  that  he  will  sell  to  the  nearer  consumer  and  save  the  cost 
of  transportation.  His  farming  or  planting  may  be  a  ruinous  ex- 
haustion of  the  land  that  does  little  or  nothing  to  fill  his  purse, 
but  there  is  nothing  else  for  him,  so  long  as  the  foreigner  can. 
undersell  home-made  goods,  prevent  the  establishment  of  fac- 
tories, and  close  those  that  have  been  established. 

[2]  The  exchange  is  unfair  through  the  unequal  distribution 
of  risks.  The  producer  of  raw  materials  depends  upon  a 
thousand  contingencies  for  his  success,  of  which  other  producers 
know  nothing.  A  bad  crop  or  harvest  may  leave  planter  or 
farmer  with  nothing  to  sell ;  a  good  one  may  overstock  the 
market  and  pull  wheat  and  cotton  so  low  that  the  cost  of  trans- 
portation absorbs  nearly  the  whole  price.  But  the  manufacturer 
can  foresee  demand  and  adjust  the  supply  to  it,  running  his  mill 
over-time  at  one  period,  under-time  at  another.  The  English 
distribution  of  functions  thus  assigns  all  the  certainties  to  one 
Qation,  all  the  risks  to  another. 

§  207.  This  contingency  is  the  chief  element  in  fixing  the  price 
of  raw  materials.  Their  supply  vibrates  between  distant  extremes 
of  scarcity  and  plenty.     Their  producer  finds  a  great  loss  in 


"BUYING    BACK   THE   TAIL.*  21;") 

either.  The  manufacturer,  through  his  larger  power  of  adjust- 
ment to  demand,  can  ordinarily  avoid  these  ruinous  extremes. 
The  country  that  exports  raw  material  is  continually  losing  the 
fair  returns  of  its  labor  through  these  variations,  while  it  takes 
in  pay  goods  at  a  price  that  is  permanent  and  profitable  to  the 
manufacturer.  Such  a  country  is  consequently  a  large  exporter 
of  the  precious  metals  to  pay  for  its  importations. 

[3]  It  was  an  old  and  atrue  jestof  the  manufacturing  countries 
at  the  expense  of  those  who  supplied  them  with  raw  material  and 
took  manufactures  in  exchange,  that  these  latter  "  sold  the  hide 
for  sixpence  and  bought  back  the  tail  for  a  shilling,"  Take  the 
case  of  a  planter,  who  raises  both  cotton  and  breadstuflfs  for  ex- 
portation, as  the  best  illustration  of  the  position  of  the  whole 
country.  His  cotton  is  worth  from  ten  to  twenty  per  cent,  more 
at  the  Manchester  mill  than  when  it  left  his  plantation ;  so  mucb 
has  been  absorbed  by  the  cost  of  transportation,  and  of  the  whole 
bulk  some  ten  per  cent,  is  thrown  out  by  the  spinner  as  waste. 
His  corn  is  worth  four  times  as  much  in  Manchester,  being  far 
bulkier  in  proportion  to  its  value,  and  he  has  no  means  to  raise 
its  price  above  one-fourth  of  what  it  ordinarily  sells  for  in  Eng- 
land, as  it  then  comes  into  competition  with  the  harvests  of 
England  and  the  world.  But  it  goes  to  feed  Manchester  work- 
people, and  is  therefore  part  of  the  raw  material  of  the  cotton 
poods  that  come  back  to  clothe  his  family  and  his  work-people. 
He  buys  it  back  in  buying  those  goods,  paying  a  dollar  for  what 
brought  him  twenty-five  cents,  and  another  dollar  for  what 
brought  him  eighty.  And  then,  besides,  he  must  pay  the  cost 
of  bringing  it  back  from  Manchester  to  his  plantation.  He  had 
better  have  employed  people  to  spin  and  weave  his  cotton  and 
consume  his  corn  at  home,  even  though  their  money  cost  were 
much  greater  than  that  of  Manchester  goods.  For  as  he  is  both 
a  producer  and  a  consumer,  his  interest  is  in  the  comparative 
price  of  the  two  classes  of  goods,  not  only  in  the  cheapness  of 
that  which  he  buys.  And  if — as  must  be  the  case — a  factory 
near  at  hand  gives  him,  and  the  people  dependent  on  him,  a 


216  ELEMENTS   OF   POLITICAL   ECONOMY. 

larger  share  of  manufactured  goods,  it  matters  very  little  whether 
the  money-price  that  he  pays  is  great  or  small. 

[4]  If  there  were  no  other  reason  for  the  policy  that  scxiiks  to 
reduce  foreign  commerce  to  a  minimum,  a  sufl5cient  one  would  be 
found  in  its  effect  upon  the  human  material  it  employs.  Bentham 
thought  the  worst  possible  use  that  could  be  made  of  a  man  was 
to  hang  him;  a  worse  still  is  to  make  a  common  sailor  of  him. 
The  life  and  the  manly  character  of  the  sailor  has  been  so 
adorned  in  song  and  prose,  and  the  real  excellences  of  indivi- 
duals of  the  profession  have  been  made  so  prominent,  that  we 
forget  what  the  mass  of  this  class  of  men  are,  and  what  repre- 
sentatives of  our  civilization  and  Christianity  we  send  out  to  all 
lands  in  the  tenants  of  the  forecastle.  How  could  they  be  other- 
wise, unless  gifted  with  superhuman  powers  of  resistance  to 
temptation,  since  they  are  ordinarily  shut  out  from  all  the 
humanizing  and  elevating  influences  of  human  society  and  its 
natural  relationships  ? 

And  then,  be  it  remembered,  their  work,  while  the  most 
difficult,  dangerous  and  severe  of  human  employments,  is  also 
the  most  unproductive,  the  most  useless.  John  Fitch's  applica- 
tion of  steam-power  to  navigation  has  rendered  no  greater  service 
to  mankind  than  this,  of  reducing  the  number  of  those  who  are 
required  to  conduct  the  interchanges  of  commodities  between 
nations. 

§  208.  Domestic  commerce,  or  the  interchange  of  services  ana 
commodities  between  persons  of  the  same  nation,  is  one  of  the 
bonds  that  Providence  employs  to  bring  every  people  into  closer 
and  firmer  unity.  It  grows  out  of  that  differentiation  of  function 
that  characterizes  organisms  of  a  higher  order  of  life.  It  weaves 
across  the  country  a  web  of  intercommunication,  binding  part  to 
part  in  the  bonds  of  mutual  service  and  helpfulness.  The  national 
unity  rests  on  deeper  foundations  (§  23-25),  but  this  is  one  of  the 
natural  expressions  of  that  unity,  which  reaots  upon  and 
strengthens  the  unity  itself.  It  tends  to  produce  tb-it  individu- 
ality ol'tyjm  ill  the  part,  which  tigaiu  produces  the  strong  cohe- 
rence of  tlie  whole  body  politic.     In  every  progressive   nutiou 


TRUE   AND    FALSE   COMMERCE.  217 

this  domestic  commerce  is  continually  gaining  in  its  amount  and 
in  proportion  upon  commerce  with  other  peoples.  Its  people  arc 
continually  more  and  more  employed  in  serving  and  helping  each 
other — less  and  less  in  serving  foreigners. 

A  nation  that  is  declining  in  industrial  coherence  and  inde- 
pendence grows  faster  in  foreign  than  domestic  commerce.  Its 
people  lose  their  diversity  of  pursuits,  and  conform  more  and 
more  to  a  single  type  of  character  as  of  occupation,  to  the  loss 
of  true  individuality.  Their  lines  of  transit  run  across  the 
country  in  one  direction, — to  the  seashore ;  they  are  the  warp 
without  the  woof  of  the  web.  That  people  are  sinking  to  a  lower 
grade  of  social  organization;  the  parts  grow  in  likeness  to 
each  other,  and  their  numbers,  however  great,  are  but  the 
numerical  repetition  of  a  single  specimen. 

The  amount  of  a  nation's  foreign  commerce  is  therefore  the 
worst  possible  test  of  its  general  prosperity.  A  disproportion 
of  this  to  domestic  commerce  shows  that  the  nation  is  not  self- 
contained  and  self-sufl&cient,  but  dependent  upon  other  nations 
either  for  the  supply  of  its  necessities  or  a  market  for  its  labor. 
Yet  the  increased  returns  of  exports  and  imports  are  often 
gravely  offered  in  evidence  of  the  beneficent  effects  of  a  cer- 
tain course  of  national  policy.  A  fair  test  is  to  be  found  in 
the  average  consumption  of  articles  of  prime  necessity  per  head 
of  the  population,  which  continually  tells  quite  another  story. 

§  209.  Every  nation  contains  within  its  own  providential 
boundaries  the  means  of  making  itself  independent  of  all  others 
as  regards  the  supply  of  articles  of  prime  necessity.  There  is, 
therefore,  no  need  of  employing  a  large  number  of  its  people 
and  a  large  amount  of  its  capital  in  transporting  those  articles 
across  the  ocean.  They  are  always  of  a  bulky  nature,  and 
therefore  manifestly  unsuited  for  long  transport. 

Legitimate  and  natural  commerce  moves  rather  along  the  me- 
ridians than  along  the  parallels  of  latitude.  It  is  the  inter- 
change of  the  products  of  one  climate  with  those  of  another.  Its 
mission  is  to  "mix  the  seasons  and  the  jL^olden  hours"  (Tenny- 
son), nut  to  '^  carry  coals   to  Newcastle"  by  bringing  to  each 


218  ELEMENTS   OF   POLITICAL   ECONOMY. 

people  the  things  that  it  could  abundantly  produce  at  home. 
From  such  natural  commerce  to  ''loose  her  latest  chain"  is  the 
clear  duty  of  every  nation. 

Or,  if  we  take  commerce  in  the  largest  sense,  as  meaning  the 
whole  intercourse  of  nation  with  nation,  it  will  include  the  inter- 
change of  ideas,  the  naturalization  of  better  political  and  indus- 
trial methods.  And  with  this  intellectual  interchange  there 
would  naturally  be  associated  a  commerce  in  those  articles 
whose  artistic  excellence  and  elaboration  of  workmanship  cause 
them  to  present  in  a  concentrated  shape  the  very  flower  of  the 
producing  nation's  intellectual  life  and  spirit. 


CHAPTER  ELEVENTH. 

The  Science  and  Economy  of  Manufactures  —  The 
Theory. 

§  210.  The  progress  of  the  industrial  state,  as  of  every  other 
organized  society,  and  indeed  of  organic  life  as  a  whole,  is  in  the 
transition  from  the  simple  to  the  complex,  from  the  state  in 
which  the  parts  resemble  each  other  and  the  whole  organism,  to 
that  in  which  the  diflFerence  between  the  parts,  and  between  the 
whole  and  the  parts,  is  as  great  as  possible.  ^'  As  we  see  in  ex- 
isting barbarous  tribes,  society  in  its  first  and  lowest  forms  is  a 
homogeneous  aggregation  of  individuals,  having  like  powers  and 
like  functions;  the  only  marked  difference  of  function  being 
that  which  accompanies  the  difference  of  sex.  Every  man  is 
warrior,  hunter,  fisherman,  toolmaker,  builder;  every  woman 
performs  the  same  drudgeries ;  every  family  is  self-sufficing,  and 
save  for  purposes  of  aggression  and  defence,  might  as  well  live 
apart  from  the  rest''  (Herbert  Spencer). 

With  the  advance  of  society,  this  uniformity  disappears. 
From  being  "  Jack  of  all  trades  and  master  of  none,"  each 
member  of  the  community  confines  his  attention  to  a  single  pur- 
suit, and  does  that  one  thing  better  and  more  effectively.  Me- 
thods of  work  improve ;  a  smaller  number  of  workers  and  a  less 
amount  of  labor  is  required  to  raise  food  for  the  whole  commu- 
nity. The  rest  are  gradually  set  free  for  other  employments, 
some  to  tan  skins  into  leather  and  make  shoes;  others  to  turn 
wool  into  cloth  and  make  clothes ;  others  to  dig  up  iron  and 
smelt  it  for  tools,  agricultural  implements  and  articles  of  house- 
hold use ;  others  to  mould  clay  into  pottery  or  bricks,  or  quarry 
stone  for  houses ;  others  to  cut  down  trees  and  fashion  them  into 
furniture  and  other  wood-work.  Each  of  these  trades,  as  the 
numbers  of  society  and  the  consequent  demand  for  their  pro- 
ductions increase,  is  capable  of  continued  subdivision  of  labor. 
The  tanner  ceases  to  make  shoes,  the  carpenter  to  cut  down 

219 


220  ELEMENTS    OF   POLITICAL    ECONOMY. 

timber  the  weaver  to  spin  his  yarn  or  to  fashion  his  cloth  into 
garments.  And  at  every  subdivision  of  function,  the  efficiency 
of  the  workman  and  the  skill  demanded  of  him  are  increased. 
Arkwright,  the  Lancashire  barber,  may  or  may  not  have  in- 
vented the  spinning-jenny,  but  he  stamped  his  name  on  the  his- 
tory of  industry  when  he  devised  the  first  factory,  and  taught 
the  North  of  England  weavers  and  capitalists  to  substitute  coope- 
ration as  regular  as  clock-work  for  desultory  and  wasteful  work. 

§  211.  Every  change  of  this  sort  is  a  real  gain  to  society  at 
large  and  to  each  member  of  it.  The  members  of  the  nation 
who  had  before  no  need  or  less  need  of  each  other,  become  more 
helpful  and  useful  to  each  other.  The  farmer  finds,  with  the 
artisan  within  reach,  a  ready  market  for  his  produce.  He  can 
buy  with  its  price  plenty  of  clothing,  utensils  and  furniture, — 
plenty  of  the  things  that  add  to  life's  comfort  and  take  away  its 
sordidness.  He  can  purchase  improved  implements  that  make 
his  work  easier  and  more  fruitful.  He  is  more  closely  associated 
with  his  fellow- citizens  than  before  j  every  wise  purchase  or  sale 
that  he  makes  is  an  interchange  of  services,  by  which  both  par- 
ties are  benefited.  There  is  a  real  and  growing  harmony  of  in- 
terests between  all  classes;  the  advance  of  either  in  wealth 
enables  the  others  to  find  a  better  market  for  what  they  would 
sell;  and  as  wealth  leads  to  the  expenditure  of  larger  capital 
and  thus  to  more  productive  work,  the  prosperity  of  each  enables 
the  other  to  buy  of  it  to  better  advantage. 

§  212.  The  growth  of  the  power  of  association  is,  at  the 
same  time,  growth  in  individual  freedom.  The  more  closely 
man  are  thus  united,  the  more  free  each  one  is  to  give  full  play 
to  the  bent  of  his  own  character.  He  is  not  forced  to  make  his 
living  by  an  employment  for  which  he  may  have  no  taste,  and  in 
which  he  can  therefore  never  use  his  natural  gifts  to  the  best 
advantage.  He  can  consult  his  liking.  And  men's  employ- 
ments and  daily  industries  react  powerfully  upon  general  char- 
acter; variety  of  work  produces  and  cherishes  individuality. 
The  parts  of  the  body  politic  grow  in  diversity  from  each  other 
and  from  the  whole  body ;  the  societary  type  rises   with  that 


THE   NATURAL    GROWTH    OF   INDUSTRIES.  221 

growth.  The  unity  of  the  parts  in  the  whole  bjconies  all  the 
stronger  for  the  ditierence.  The  body  is  "  fitly  joined  together 
by  that  which  every  part  supplieth,"  when  no  part  can  say  to 
another  :  "  I  have  no  need  of  thee." 

All  history  illustrates  this  growth  in  social  unity,  through 
growth  in  individuality.  Spain  proscribed  individuality  and 
freedom;  her  only  philosophers  were,  like  St.  Theresa  and 
Ignatius  Loyola,  those  who  taught  the  absorption  and  annihila- 
tion of  the  man  in  the  corporation ;  the  consequence  has  been 
a  growing  lack  of  vital  cohesion  and  unity  in  a  monarchy  that 
once  aspired  to  universal  empire.  Germany  was  riven  into 
fragments  by  feudalism,  but  her  individualistic  philosophy,  whose 
first  word  is  "  I  am  I,"  has  gone  hand  in  hand  with  her  indus- 
trial progress,  in  binding  her  into  a  compact  and  vigorous  em- 
pire. 

See  Prof.  F.  D.  Maurice's  Lectures  on  Social  Morality. 

§  213.  This  industrial  growth  is  the  natural  course  of  all  pro- 
gressive societies.  They  grow  more  diversified  in  their  work, 
if  the  constitution  and  course  of  their  nature  be  not  interfered 
with.  Were  there  no  possibility  of  interference,  the  whole  pro- 
cess might  be  left  to  nature,  except  so  far  as  legislation  is  needed 
to  restrain  those  who  are  unwilling  to  give  justice  to  the  rest. 

Interferences,  however,  do  arise;  some  from  within,  some 
from  without.  Unjust  laws,  artificial  panics,  badly  imposed  or 
excessive  taxes,  unwise  economy  of  labor,  restrictions  on  home 
trade,  the  currency  of  doubtful  money  and  false  theories,  the 
absence  of  general  education  and  intelligence,  and  many  other 
things  already  adverted  to,  prevent  the  industrial  community 
from  going  forward  as  it  might.  To  remove  all  such  restrictions 
must  be  among  the  first  duties  of  the  statesman  as  an  econon;ist. 

§  214.  But  interferences  come  from  without  also.  Sometimes 
these  grow  out  of  wars  and  conquests,  as  when  the  Philistines 
would  not  allow  the  Israelites  to  carry  on  the  trade  of  the  smith, 
lest  they  "  should  make  them  swords  or  spears,"  and  he  who 
needed  a  smith's  help  had  to  go  down  to  Philistia.  At  others 
they  grow  out  of  the  state  of  dependence  in  which  one  country 


222  ELEMENTS  OF   POLITICAL   ECONOMY. 

Stands  to  another.  Colonies  have  been  continually  jramped  and 
held  back,  that  they  might  contribute  to  the  profits  of  industry 
in  the  mother  country,  rather  than  develop  a  native  industry  of 
their  own.  In  1827  Mr.  Huskisson  of  the  British  ministry 
told  our  Minister  "  that  it  was  the  intention  of  the  British  gov- 
ernment to  consider  the  intercourse  of  the  British  colonies  as 
being  exclusively  under  its  control,  and  any  relaxation  from  the 
colonial  system  as  an  indulgence,  to  be  granted  on  such  terms  as 
might  suit  the  policy  of  Great  Britain  at  the  time  it  was  granted." 

§  215.  But  without  the  employment  of  either  military  force 
or  political  domination,  it  is  possible  and  not  unusual  for  one 
country  to  keep  another  in  a  state  of  industrial  dependence  and 
check  its  growth.  Were  all  countries  equal  at  the  start  and 
sure  to  remain  so,  this  could  not  happen.  If  they  had  all  the 
same  command  of  capital,  had  they  all  equal  skill  and  intelli- 
gence, were  they  all  subject  to  the  same  taxation,  then  any 
aggression  could  be  but  temporary  and  would  be  punished  by 
equal  loss  in  some  other  direction.  But  this  is  by  no  means  the 
actual  state  even  of  the  nations  called  civilized.  No  two  of 
them  have  reached  the  same  point  in  industrial  development, 
some  are  far  ahead,  because  of  an  earlier  use  of  natural  advan- 
tages ;  others  lag  far  behind,  though  they  are  striving  with  all 
energy  to  come  up. 

Suppose,  now,  that  two  nations  that  differ  thus  should  estab- 
lish full  and  free  commercial  intercourse  between  each  other, 
what  will  be  the  necessary  effect  ?  At  first  sight  it  might  seem 
that  the  rich  nation  would  be  conferring  benefits  upon  the  poorer 
one,  which  the  other  could  but  feebly  return;  that  the  difference 
between  them  would  be  gradually  and  steadily  diminished 
through  the  poorer  nation  coming  forward  in  industrial  develop- 
ment, and  taking  an  ever  higher  place,  and  that  more  rapidly 
than  before. 

But  experience  shows  that  just  the  reverse  of  this  is  the  case. 
The  rich  nation  becomes,  for  a  time  at  least,  richer  by  the  ex- 
change ;  the  poor  nation  permanently  poorer.  The  former, 
through  its  command  of  cheap  capital,  and,  by  consequence,  its 


DOCTRINAIRE   OBJECTIONS.  223 

greater  division  and  efficiency  of  labor,  can  continually  undersell 
the  latter  in  whatever  it  chooses  to  export  to  it,  for  it  can  send 
it  manufactured  goods  at  prices  with  which  the  manufacturers 
of  the  other  cannot  compete.  The  process  of  accumulating 
capital  in  the  poorer  country  is  decisively  checked  j  its  people 
are  reduced  from  what  variety  of  industry  and  mutual  exchange 
of  services  they  had  possessed,  to  a  uniformity  of  employment  in 
which  no  man  needs  or  helps  his  neighbor.  Their  power  of  asso- 
ciation is  destroyed ;  money,  the  instrument  of  association,  is 
drained  out  of  the  country.  Nothing  is  left  them  but  the  pro- 
duction of  such  raw  materials  as  the  richer  nation  chooses  to 
buy,  and  how  unpro6table  a  commerce  of  that  sort  is,  we  have 
already  seen  (§  206).  The  country  steadily  declines  in  all  the 
elements  of  productive  power,  even  in  the  character  of  the 
single  home  industry  that  is  left  it  (§  92).  "  From  him  that 
hath  not"  is  "  taken  away  that  which  he  seemeth  to  have." 

§  216.  Here  a  sweeping  objection  meets  us.  A  number  of 
theorists  tell  us  that  "  even  if  this  be  the  result  of  unrestricted 
trade  between  two  such  countries,  the  weaker  has  no  lawful 
power  to  put  a  stop  to  it.  The  sphere  and  duties  of  government 
do  not  extend  to  the  direction  and  regulation  of  industry.  It 
might  as  well  undertake  to  tell  its  people  what  they  are  to 
believe,  as  to  tell  them  what  they  must  make,  and  where  they 
must  buy.  The  right  to  exchange  one's  property  wherever  one 
pleases,  is  a  part  of  the  right  of  property  itself.  It  is  robbery 
of  the  individual  citizen,  therefore,  to  say  that  he  shall  so  man- 
age his  buying  and  selling  as  to  foster  a  native  rather  than  a 
foreign  industry."  *'  I  assume,"  says  Prof.  Thorold  Rogers, 
"  that  there  are  such  rights  as  are  called  natural,  and  that  these 
are  the  inalienable  conditions  under  which  individuals  take  part 
in  social  life.  No  one  questions  the  natural  right  of  free  ex- 
change." 

This  notion  rests  on  the  old  exploded  fiction  that  men  passed 
out  of  a  state  of  nature  into  the  social  state  by  a  social  contract, 
in  which  so  much  of  their  natural  rights  as  were  necessary  to 
the  being  of   society    were   given   up,  and    all   others  were 


224  ELEMENTS    OF    POLITICAL   ECONOMY. 

retained.  But,  as  already  stated  (§  23),  natural  rights  of  indi- 
viduals have  no  existence  in  any  real  sense  except  in  society 
itself,  and  wherever  the  well-he'mg  of  society  demands  it,  they 
must  give  way.  It  rests  with  the  recognised  authorities  of  the 
nation,  those  through  whom  the  national  will  expresses  itself,  to 
say  how  far  this  is  necessary,  and  when  that  decision  is  made, 
no  one  has  a  right  to  complain  of  spoliation.  Else  it  would  be 
the  moral  right  of  every  citizen  to  refuse  to  pay  school-tax,  or  a 
tax  for  any  other  purpose  that  the  bare  existence  of  the  state 
did  not  involve. 

This  theory  would  introduce  the  most  utter  slavery,  the  des- 
potism of  the  individual  will,  under  the  plea  of  liberty.  It 
would  give  to  every  individual  in  the  state  the  Uberum  veto,  by 
which  Poland  was  ruined.  It  would  leave  no  choice  with  any 
nation  but  to  follow  a  policy  of  inaction  that  would  expose  its 
people  to  the  utmost  suflFering,  and  ultimately  lead  to  the 
destruction  of  the  bonds  of  society.  And  even  if  there  were  not 
one  dissenting  voice  within  the  nation  itself,  still  the  unanimity 
could  take  no  efiect  for  lack  of  a  proper  organ  for  its  expression. 
The  uncertain  agency  of  voluntary  leagues  and  associations 
would  be  the  only  means, — a  means  altogether  insufficient, — to 
carry  out  their  purpose.  When  the  sense  of  national  necessity 
was  clear  and  strong,  the  people  would  abide  by  such  voluntary 
decisions,  but  in  more  ordinary  moods  they  would  begin  to  say  : 
"  What  matter  will  it  make  if  I  buy  this  of  one  man,  and  not 
from  another  ?  It  is  but  a  drop  in  the  bucket  after  all.'*  Now 
the  very  function  of  the  government  is  to  express  and  embody 
the  higher  and  purer  will  of  the  people,  and  not  their  lower, 
self-indulgent  moods.  The  great  and  true  ruler  is  the  one  who 
can  distinguish  between  the  two,  and  direct  his  policy  ac- 
cordingly. 

The  fragment  of  truth  which  gives  this  error  all  the  validity 
that  it  has,  is  that  the  government,  as  a  rule,  is  concerned  with  the 
industrial  (as  with  the  intellectual)  life  of  its  people  indirectly  ; 
with  some  other  provinces  directly.  It  is,  as  the  preamble  of 
the  U.  S.  Constitution  very  well  expresses  it,  to  ^^ provide  for 


•' TKOMOTK       AND    '^rUUViDK.  Z-Li) 

the  common  defence"  but  to  *' promote  the  general  welfare." 
Theorists  who  run  to  the  other  extreme  would  have  government 
take  as  much  charge  of  the  one  sphere  as  the  other.  They 
would  substitute  national  workshops,  for  those  of  individual 
employers.  They  would  put  the  rights  of  property  under  great 
restraints  or  abolish  it  utterly.  But  as  the  government  is  not 
the  power  that  propels  the  ship  of  state,  but  the  helmsman 
(jguhernator)  that  steers  it,  this  extreme  is  as  false  as  the  other, 
while  it  grew  out  of  the  other  by  a  necessary  reaction.  Well 
did  Edmund  Burke  say  that  to  draw  the  line  between  what  the 
state  should  do  as  such,  and  what  it  should  leave  to  the  activity 
of  individuals,  is  one  of  the  nicest  questions  in  legislation. 
These  sweeping  and  wholesale  solutions  of  it,  just  because  of 
their  simplicity  and  directness,  are  under  suspicion  as  false. 

Another  form  that  the  objection  takes  is  this  :  "  The  state  should  exact 
a  tax  from  no  man  unless  it  bo  made  payable  into  its  own  treasury  and 
used  for  its  own  ends.  But  the  difference  between  the  price  of  the  home- 
made article  and  that  at  which  the  foreigner  would  have  provided  it  is 
such  a  tax ;  therefore  it  is  unfair."  In  other  words  the  state  has  no 
right  to  ^romofe  but  only  to  ^rortde /or  things  and  actions  needful  to 
the  nation's  life. 

§  217.  In  the  state,  therefore,  inheres  the  right  to  promote 
the  industrial  development  of  the  people,  as  necessary  to  their 
*'  general  welfare."  And  the  right  is  no  less  than  a  duty.  If 
it  be  the  first  duty  of  the  nation  to  provide  for  its  own  existence, 
there  is  involved  in  that  the  duty  to  promote  the  largest  and  full- 
est existence  possible,  the  free  development  of  all  sides  of  the 
national  life.  If  the  state  exist  that  justice  may  be  done,  that 
justice  is  not  to  be  conceived  merely  in  the  jural  sense;  as  the 
popular  phrase  extends  its  application,  the  people  must  bo 
allowed  "  to  do  themselves  justice,"  and  all  obstacles  to  that 
end  must  be  removed.  If  the  state  exist  that  freedom  may  be 
attained  and  realized  for  its  people,  then  it  must  make  such 
provision  that  its  people  shall  possess  real  industrial  freedom, — 
the  freedom  of  neighborhood  commerce  and  mutual  service  with 
each  other.  It  puts  restraint  upon  the  international  trade,  that 
the  far  more  important  domestic  trade  may  exist  and  be  free. 
15 


226  ELEMENTS    OF    POLITICAL   ECONOMY. 

"  But  aie  not  its  citizens  at  all  times  free  to  trade  wherever 
they  please,  without  its  interference?  If  they  think  it  best  to 
buy  of  the  home  producer  'they  can  do  so." 

They  are  not  free,  if  no  one  can  undertake  to  produce  what 
they  need  at  home,  for  want  of  assurance  and  security.  In  such  a 
case  the  right  and  natural  thing  is  for  the  people  to  say,  through 
their  organ,  the  government,  "  Go  ahead ;  build  your  factory; 
put  in  your  machinery ;  we  will  buy  of  you/'  In  so  saying 
they  are  acting  out  their  own  freedom  of  choice  to  the  fullest 
degree.  They  are  saying,  "  We  choose  to  have  a  free  choice 
between  the  home  and  the  foreign  maker,  and  so  we  pledge 
oursekes  that  the  former  shall  have  a  chance  to  establish  him- 
self." All  freedom  is  won  by  sacrifice ;  the  wise  and  far-sighted 
people  is  the  one  that  will  make  the  sacrifice — that  will  suifer 
the  pains  of  a  bloody  revolution,  as  more  endurable  than  the 
long,  wasting  misery  that  centuries  of  tyranny  inflict.  Such  a 
principle  will  not  be  left  out  of  sight  when  such  a  people  enters 
the  work-shop  and  the  factory. 

A  writer  in  the  Fortnightly  Review  (London)  says:  "An  observant 
journalist  has  remarked  that  it  is  a  singular  fact  that  in  Austria  '  those 
who  have  vigorously  struck  down  every  ecclesiastical  and  political 
monopoly  throughout  the  empire  are  the  most  vehement  advocates  of  a 
restrictive  commercial  policy,  while  on  the  other  hand  those  who  are  in 
favor  of  free  trade  are  the  most  ardent  supporters  of  ecclesiastical 
privilege.'  Austria  is  not  singular  in  this  respect.  In  France  the  ad- 
vocates of  free  speech  and  a  free  press  are  restrictionists ;  while  im- 
perialists, as  a  rule,  are  free  traders.  In  the  United  States  the  abolitionists 
or  Republicans  are  avowed  restrictionists,  while  the  Democrats  are  de- 
cidedly in  favor  of  free  trade.  Precisely  the  same  phenomenon  may  be 
observed  in  the  British  colonies.  In  Canada,  Australia  and  New  Zealand 
the  party  of  progress  has  always  been  identified  with  a  restrictive  com- 
mercial policy,  while  the  Conservatives  are  the  most  uncompromising  of 
free  traders.  Indeed,  it  may  be  said  that  one-half  the  entire  English- 
speaking  race  are,  in  one  shape  or  another,  in  favor  of  a  restrictionist 
policy,  and  of  this  half  the  great  majority  are  advanced  liberals.  It  ia 
the  national  creed  in  the  United  States,  Canada,  and  the  leading  Australian 
and  New  Zealand  colonies.  .  .  Strange  as  it  may  appear,  it  is  neverthe- 
less true  that  it  is  just  because  the  party  of  progress  in  the  colonies  are 
opposed  to  monopoly  in  every  shape  that  they  are  the  advocates  of  re- 
striction in  regard  to  commerce.  Instead  of  that  policy  savoring  of 
monopoly,  they  maintain  that  it  has  exactly  the  opposite  tendency  ;  and 


IN   TEACE    PREPARE   FOR   WAR.  2127 

their  chief  object  in  impoaing  import  duties  is  to  put  down  monopoUcB, 
by  extending  the  sphere  of  competition." 

§  218.  No  violent  transition  from  the  sphere  of  the  state's 
<lirect  duties  is  needed  to  carry  it  into  this  of  its  indirect  in- 
fluence. Indeed,  it  cannot  discharge  the  former  without  exer- 
cising the  latter.  It  must  make  large  purchases  or  manufacture 
in  its  own  workshops  large  supplies  for  the  army,  navy  and  other 
executive  branches  (§§  297,  302).  In  either  case  the  choice 
between  home  and  foreign  industry  is  forced  upon  it.  If  it 
raise  largo  sums  by  indirect  taxation,  it  must  select  the  method 
of  imposing  these, — whether  by  excises  upon  home  productions 
or  duties  upon  those  of  other  countries. 

Its  provision  for  its  own  safety  in  case  of  war  involves  the 
cherishing  of  such  industries  as  furnish  the  great  necessaries  of 
national  use,  and  indeed  requires  their  creation.  "  In  time  of 
peace  be  prepared  for  war"  is  a  commonplace  of  statecraft.  Now 
in  war  the  government  is  of  necessity  a  large  purchaser  of  many 
sorts  of  manufactured  goods.  Foreign  commerce  is  interrupted, 
either  entirely  or  so  much  so  as  to  render  the  importation  of 
these  goods — which  are  contraband  of  war — difficult  and  hazard- 
ous, and  on  a  large  scale  impossible.  The  home  manufacturers 
that  might  have  supplied  them  cannot  spring  up  in  a  night. 
The  narrowness  of  vision,  the  lack  of  foresight,  which  prevented 
their  being  called  earlier  into  existence,  has  its  reward  in  na- 
tional perplexity,  often  in  actual  defeat. 

"  How  then  is  it/'  says  Dr.  Horace  Bushnell,  "  that  free  trade 
science  is  going  peremptorily  to  settle  all  the  great  questions  of 
public  economy  ?  For  if  we  set  ourselves  down  to  it  as  the  test 
of  economy,  and  say  it  is  final,  we  are  by  and  by  obliged  to  ask  : 
Is  there  nothing  to  be  done  or  thought  of  in  the  world  that  is 
out  of  'economy,'  and  rightly  spurns  it?  May  not  the  worst 
*  economy  '  sometimes  be  the  best  ?  To  be  fostering  modes  of 
production  when  the  trade-balance  shows  a  disadvantage  wears  a 
bad  look  certainly  as  respects  the  matter  of  economy.  But  how 
many  and  vast  supplies  are  wanted  that  must  not  be  left  to  the 
uncertainties  of  trade, — where  to  higgle  over  expense  would  be 


228  ELEMENTS    OF   POLITICAL    ECONOMY. 

even  a  contemptible  weakness  ?  This  is  true  in  particular  of  all 
the  supplies  thai;  are  needed  for  the  equipment  of  the  state  of 
war.  Without  these  no  people  is  a  proper  nation,  or  at  least  by 
any  possibility  a  strong  one.  These,  therefore,  we  must  not 
only  have,  but  must  have  the  way  of  making  at  any  cost." 

See   Scribner'a  Magazine  for  July  1871,  article  on  "Free  Trade   and 
Protection." 

219.  It  is  sometimes  urged  as  an  argument  in  favor  of  unre- 
stricted trade,  that  *'  the  mutual  dependence  of  the  nations  thus 
produced  is  eminently  promotive  of  the  cause  of  international 
peace.  It  will  put  the  nations  under  bonds  to  keep  the  peace, 
by  placing  each  of  them  in  such  a  relation  to  the  rest  that  a 
war  with  any  other  will  inflict  ruinous  losses  upon  its  industries, 
and  therefore  it  will  create  within  each  a  sentiment  in  favor  of 
peace,  and  a  class  whose  interests  are  bound  up  with  its  preser- 
vation." 

An  unhappy  comment  upon  this  rose-colored  theory  is  found 
in  the  fact  that  the  majority  of  modern  wars  have  been  under- 
taken, not  for  national  honor  or  pride,  but  for  the  sake  of  trade, 
— "  the  fair,  white- winged  peace-maker."  The  communities  most 
at  war  with  the  rest  of  the  world  have  generally  been  those  in 
which  the  spirit  of  trade  predominated — Tyre,  Carthage,  Venice, 
England,  &c.  A  great  English  military  historian  and  general. 
Sir  W.  Napier,  lays  it  down  as  a  rule  that  the  traders  have 
begun  the  wars  and  the  soldiers  have  ended  them  (See  §§  257, 
278,  note). 

Furthermore,  this  argument  assumes  that  war  in  and  of  itself, 
is  the  chief  thing  to  be  avoided  in  international  affairs.  It 
leaves  out  of  sight  the  truth  that  a  just  and  righteous  war  may 
be  the  clear  vocation  of  a  nation,  and  the  preparation  for  it  the 
very  highest  duty.  If  unrestricted  trade  unfits  a  people  for  the 
infliction  of  just  punishment  upon  unrighteous  nationalities,  it 
unfits  it  for  one  of  the  very  highest  ends  for  which  nations  exist; 
— unfits  it  for  rendering  to  other  nations  the  very  highest 
service  possible, — the  defending  them  against  the  unjust 
invasion  of  their  rights,  or  the  chastising  them  into  a  better 


OUR  FINANCIAL  METHODS.  229 

state  of  mind.  Such  cases,  do,  undoubtedly,  exist  j  but  they  are 
oxceptiooal,  and  not  happy  exceptions  either.  Europe  has  no 
more  pitiable  spectacle  than  the  sight  of  a  nation  foremost  in 
wealth,  culture  and  capacity  for  just  and  impartial  indignation, 
yet  bound  hand  and  foot  by  trade  motives,  forswearing  its  better 
instincts,  deserting  its  natural  allies,  and  held  back  from  ex- 
erting its  just  influence  upon  the  world's  politics. 

Furthermore,  the  efi'ect  of  such  unrestricted  commerce  is  to 
place  the  weaker  and  less  developed  of  the  two  countries  at  the 
mercy  of  the  other.  The  dependence  is  never  fully  mutual  and 
equal,  and  in  the  nature  of  things  cannot  be.  The  one  is  fully 
provided  with  all  the  munitions  and  appliances  of  war ;  the  other 
has  all  these  to  seek.  Hence  the  rule  of  international  law  now 
coming  into  recognition,  that  neutral  nations  are  bound  to  strict 
(not  merely  to  impartial)  neutrality,  as  the  weaker  of  the  two 
nations  at  war  will  derive  more  benefit  than  the  other  from  the 
power  of  making  unreserved  purchases  on  neutral  soil.  This 
fact  of  the  unprepared  state  of  the  more  backward  country  can- 
not be  hid  from  the  other;  in  case  of  a  disagreement,  it  furnishes 
a  strong  motive  to  overbearing  insolence  and  aggression.  It  has 
been  repeatedly  alleged  as  a  motive  for  rushing  into  hostilities, 
never  for  holding  back. 

§  220.  A  comparative  study  of  the  financial  methods  of  dif- 
ferent nations  discloses  circumstances  that  render  discrimination 
in  favor  of  the  home  manufacturer  the  only  fair  mode  of  pro- 
ceeding. One  country  makes  eff'orts  to  be  rid  of  the  burden  of 
debt,  and  to  that  end  imposes  a  heavy  direct  or  indirect  taxation 
upon  its  people;  another  funds  its  debts  in  perpetual  annuities, 
and  has  no  intention  of  paying  more  than  the  interest.  One 
country  has  adopted  a  very  eflScient  but  expensive  system  of  gov- 
ernment by  paid  and  responsible  oflScials  ;  another  possesses  and 
employs  a  large  class  of  men  of  wealth  and  leisure,  upon  whom  the 
work  of  legislation  and  the  local  administration  of  justice  can  be 
devolved.  One  country  has  a  very  high  ideal  of  the  duties  and 
responsibilities  of  government,  and  considers  the  health  and  in- 
telligence of  the  people  its  charge,  and  taxes  all  property-owners 


230  ELEMENTS   OF    POLITICAL   ECONOMY. 

accordingly ;  another  leaves  these  matters  to  the  care  and  in- 
terest of  individuals.  One  country  expects  in  all  its  people  a 
certain  degree  of  civilization  implying  a  corresponding  expendi- 
ture for  fitting  habitations,  clothing,  food,  education,  &c.,  and 
thence  an  adequate  scale  of  wages  to  support  this  expendi- 
ture; another  country  is  satisfied  to  see  large  masses  of  its 
population  but  slightly  raised  above  the  brutes,  and  toiling 
for  a  pittance.  One  country  extends  over  a  vast  and  sparsely- 
settled  territory,  and  this  fact  adds  to  all  the  national  ex- 
penses ;  the  other  has  a  small  territory  with  a  compact  popula- 
tion. One  country,  through  force  of  circumstances,  has  been 
compelled  to  ask  very  great  sacrifices  of  its  people  for  the 
national  safety  and  defence;  the  other  has  long  dwelt  at  peace. 
Any  one  or  more  of  these  circumstances  make  it  just  and  fair 
to  compensate  for  the  weight  of  home  burdens  by  duties  high 
enough  to  give  the  home  manufacturer  a  fair  chance.  Nothing 
could  be  more  unequal  than  equality  of  duties  in  such  cases. 

These  things  are  not  superficial  matters  that  may  be  adapted 
to  the  economic  teachings  of  every  new  set  of  economists.  The 
national  methods  of  finance  are  the  expression  of  the  nation's 
life  ;  their  peculiarities  are  the  expression  of  that  in  the  nation's 
life  which  gives  it  individuality  and  historic  distinctness.  They 
need  continual  and  steady  reform,  that  they  may  be  kept  up  to 
the  national  standard  of  right,  and  the  national  average  of  intelli- 
gence. But  reform  is  not  revolution;  it  is  evolution  rather. 
In  these  things  there  is  for  every  nation  a  "  constitution  and 
course  of  nature,"  whose  laws  must  be  learned  and  followed  in 
wise  change  and  in  wise  resistance  to  needless  change. 

For  these  considerations  the  cosmopolitical  school  have  no 
place;  they  think  their  consideration  in  connection  with  the 
question  of  wealth  and  economy  an  impertinence.  They  write 
as  if  there  were  no  nations,  or  as  if  they  were  merely  local  and 
conventional  arrangements  for  police  purposes.  With  Cobden, 
they  would  gladly  see  all  boundary  lines  wiped  from  the  map ; 
and  like  him,  they  regard  nations  as  necessary  evils.  Their 
arguments  are  never  based  on  the  necessities  of  national  life, 


TARIFFS   AND   THEIR   METHODS.  231 

and  the  means  to  attain  the  largest  and  fullest  degree  of  that 
life ;  but  on  "  the  maximum  of  production  throughout  the 
world."  They  know  of  no  interest  save  pocket-interest,  whereas, 
as  Mr.  Mill  well  says,  a  man's  interest  is  whatever  he  takes  an 
interest  in.  And  every  good  citizen  will  take  an  interest  in  the 
industrial  development  and  independence  of  his  own  country. 
We  might,  as  Dr.  Bushnell  does,  concede  the  force  of  all  their 
economic  arguments,  and  then  reject  their  conclusions  on  higher 
grounds. 

So  much  for  arguments  drawn  from  political  theories  and  the 
replies  to  them.  From  these  we  pass  to  the  purely  economic  argu- 
ments in  favor  of  restrictions  upon  foreign  trade,  and  first  to 
those  that  would  justify  the  imposition  of  those  restrictions  per- 
maiienfly,  if  need  were.  But  first  of  all  as  to  the  methods  of 
restriction. 

§  22L  The  state,  then,  possessing  the  right  to  discriminate 
between  home  and  foreign  industry,  and  being  prompted  to  do 
BO  by  reasons  of  public  policy  as  well  as  by  a  desire  to  promote  the 
welfare  of  its  citizens,  has  to  make  a  choice  of  the  best  means 
to  that  end.  It  might  directly  encourage  the  worker  at  home 
by  a  system  of  bounties  and  subsidies ;  but  this  plan  is  now 
generally  rejected  as  too  artificial,  and  as  open  to  great  abuses. 
Or  it  may  prohibit  the  importation  of  foreign  wares,  or  discour- 
age their  importation  by  duties  that  will  raise  their  price  high 
enough  to  enable  the  native  manufacturer  to  compete  with  them 
in  the  home  market.  Prohibitions  are  now  properly  regarded  as 
unwise ;  discriminating  duties  are  adopted  as  preferable  by  nearly 
all  civilized  nations. 

Another  question  of  method  is  the  choice  between  specific  and 
ad  valorem  duties.  The  former  exact  so  much  for  each  pound, 
yard's  length  or  square  foot  of  all  goods  of  a  given  kind,  with 
nc  reference  to  their  comparative  fineness  or  value.  The  latter 
taxes  each  class  of  goods  a  certain  percentage  on  their  sworn 
value.  The  specific  form  of  duty  is  preferable,  (1)  because  its 
proper  amount  is  most  easily  and  surely  ascertained.     It  enables 


232  ELEMENTS    OF    POLITICAL   ECONOMY. 

government  to  dispense  largely  or  altogether  with  "  Custom- 
house  oaths ;"  renders  false  invoices  as  good  as  useless.  (2) 
Because  it  gives  the*  largest  protection  to  the  manufacture  of 
those  cheaper  and  bulkier  articles  which  are  of  prime  necessity 
to  the  nation.  It  thus  furnishes  a  primary  school  of  industrial 
education,  in  which  the  working  classes  and  their  captains  of 
industry  learn  to  make  cheap  things  before  they  attempt  those 
that  require  finer  elaboration.  (3)  It  diminishes  smuggling. 
To  bring  in  goods  without  paying  duty  requires  a  degree  of  con- 
cealment that  is  impossible  in  the  case  of  the  coarser  wares ; 
while  the  smallness  of  the  duty  upon  the  others,  in  comparison 
with  their  cost,  makes  it  not  worth  while  to  run  the  risk  of 
detection.  (4)  It  does  not,  as  ad  valorem  duties  do,  intensify 
the  fluctuations  in  the  price  of  an  imported  article,  by  admitting 
it  at  a  low  duty  when  it  is  cheap,  and  imposing  a  higher  duty 
when  it  is  dear.  Especially  in  times  of  crisis  and  distress,  when 
an  industry  is  ready  to  perish,  it  does  not,  as  ad  valorem  duties 
do,  invite  foreign  rivals  to  complete  the  ruin,  by  allowing  their 
goods  to  enter  almost  duty  free ;  but  by  its  unvarying  defence 
against  such  assaults  revives  the  fainting  industry, 

§  222.  Protective  duties  yield  for  a  considerable  period  a 
large  revenue  to  the  state,  but  that  is  not  the  object  of  their 
imposition.  Duties  for  revenue,  i.  e.,  too  low  to  be  protective, 
in  spite  of  their  appearance  of  moderation,  are  highly  unjust. 
They  inflict  all  the  hardships  of  indirect  and  unequal  taxation, 
without  even  the  purpose  of  benefiting  the  consumer.  Duties 
for  protection,  while  they  bring  large  revenue,  have  another 
purpose,  and,  as  we  shall  see,  benefit  the  consumer  to  a  far 
greater  extent  than  they  tax  him,  while  their  amount  is  equally 
available  for  public  uses.  Their  object  is  their  own  abolition, 
for  they  aim  at  such  a  development  of  the  national  industry  as 
shall  render  impossible  the  importation  of  the  dutiable  articles. 
To  impose  revenue  duties  is  to  accept  indirect  taxation  as  a 
permanent  method  of  finance ;  to  impose  protective  duties 
is  not. 

§  223.  It  would,  of  course,  be  absurd  for  a  young  or  a  poor 


THE   INCIDENCE  OF  DUTIES.  233 

country  to  begin  at  once  the  production  of  everything  that  her 
people  need.  The  limited  amount  of  her  capital  and  of  her 
labor  would  not  allow  of  this.  Those  coarser  articles  whose  cost 
of  transportation  is  great,  and  which  a  specific  system  of  duties 
will  do  most  to  exclude,  should  be  the  first  object;  afterward 
those  that  are  finer. 

But  even  classes  of  goods  that  are  under  very  heavy  duties 
will  continue  to  be  imported  for  a  good  while.  It  will  ordinarily 
take  the  lifetime  of  two  generations  to  acclimatize  thoroughly  a 
new  manufacture,  and  to  bring  the  native  production  up  to  the 
native  demand.  It  is  from  such  imported  goods  as  those  that 
the  customs'  revenue  is  derived  ;  and  they  will  sell  at  a  higher 
rate  than  before  the  duty  was  imposed.  The  very  object  of  the 
duty  was  to  raise  the  price  of  the  foreign  article }  if  it  failed  to 
do  so,  it  would  ofi"er  no  protection.  But  it  is  a  great  mistake  to 
suppose  that  such  articles  will  sell  for  their  old  price  plus  the 
duty.  A  part  of  the  burden  will  fall  on  the  foreign  producer 
and  the  importer.  The  amount  of  it  tliat  they  will  have  to  pay 
will  generally  be  proportional  to  the  amount  of  home  production. 
When  such  duties  are  first  imposed  and  the  amount  of  native 
competition  is  very  slight,  nearly  if  not  quite  the  whole  of  the 
duty  is  paid  by  the  consumer;  but  the  amount  thus  paid  dimin- 
ishes steadily  as  home  production  increases,  and  when  the  latter 
is  nearly  up  to  the  home  demand  nearly  if  not  quite  all  the  duty 
will  be  paid  by  the  importer  and  the  foreign  manufacturer. 
Hence  the  outcry  raised  by  these  two  classe?  against  protective 
duties  ;  it  is  not  from  love  of  the  consumer,  ncryet  from  jealousy 
of  the  profits  made  by  the  native  manufacturer,  but  from  an  un- 
pleasant consciousness  that  through  his  66*08*8  the  amount  of 
revenue  that  they  are  furnishing  to  the  government  is  steadily 
increasing  in  proportion  to  their  whole  busineea,  nud  to  the  re- 
duction of  their  profits. 

Here  are  two  bits  of  information  and  confirmation  (nva.  British  trado 
circulars.  A  ShieflBeld  steel  firm  says  :  **  We  have  a  very  larce  steel  trade 
in  America,  amounting  to  a  large  proportion  of  our  whole  buaine«s.  and 
in  that  market  there  is,  from  various  causes,  much  competition  •  *«d 
these  two  causes,  large  trade  and  competition  combined,  have  inaw^ed  «*« 


234  ELEMENTS   OF   POLITICAL   ECONOMY. 

to  be  satisfied  with  a  smaller  average  of  profit  there,  than  we  have  real- 
ized on  the  average  in  our  other  markets."  A  London  iron  firm  explains 
to  its  producing  customers:  "With  the  present  out-turn,  a  material  re- 
duction of  the  American  duty,  or  something  equally  significant,  is 
necessary  to  advance  the  price  of  iron  above  £7  a  ton."  The  very  threat 
of  a  protective  duty,  i.  e.,  the  threat  to  foster  native  production  and  com- 
petition, has  often  had  the  effect  to  lower  the  price  of  the  foreign  article.  . 

There  are  some  very  evident  inferences  from  this  fact.  (1) 
The  amount  of  a  duty  is  not  always  nor  often  the  same  as  the 
amount  of  the  protection  it  offers.  If  the  duty  be  seventy-five 
per  cent.,  and  the  foreign  manufacturer  pay  fifty  per  cent,  of  it,— 
i.  e.,  if  he  sell  his  goods  only  twenty-five  per  cent,  higher  than 
before  it  was  imposed,  then  the  protection  afforded  is  twenty-five 
per  cent,  and  no  more.  Allowance,  therefore,  must  be  made  for 
this  fact  in  imposing  protective  duties.  A  duty  is  protective  in 
intention  when  its  object  is  to  promote  home  production ;  it  is 
protective  in  effect,  whether  it  be  low  or  high,  when  it  does 
raise  the  price  of  the  foreign  article  sufficiently  to  give  the 
native  producer  a  chance  in  the  home  market.  It  must  there- 
fore be  so  high  that  the  foreign  producer  and  his  agents  cannot 
pay  it,  and  still  have  a  sufficient  profit  on  sales. 

(2)  Nothing,  therefore,  can  be  more  misleading  than  some  of 
the  wooden  calculations  made  by  the  opponents  of  protective 
duties.  They  reckon  up  the  entire  consumption  of  the  home 
made  article,  and  calculating — in  the  case  supposed — that  it  sold 
for  seventy-five  per  cent,  more  than  the  foreign  article  would 
have  cost  had  there  been  no  duty,  they  assume  that  the  vast 
sum  thus  reached  went  into  the  pockets  of  native  manufacturers, 
and  was  "  taken  out  of  the  pockets  of  the  consumer." 

For  another  false  assumption  in  such  calculations — the  assumption  that 
the  home  producer  does  or  can  charge  up  to  the  amount  of  the  protection 
he  receives — see  §  241.  Henry  Clay  used  to  tell  a  story  of  a  Free  Trade 
orator  haranguing  from  the  stump  a  crowd  of  Kentuckians.  "  Do  you 
know,  sir,"  said  he  to  an  attentive  hearer,  "  that  that  coat  on  your  back 
cost  you  a  half  a  dollar  a  yard  more  than  it  need,  because  of  this  accursed 
tariff?"  "  Wal,  stranger,"  was  the  reply,  drawled  out  slowly,  "  I  reckon 
it  must  be  so  since  you  say  it.  But  this  coat  cost  me  by  the  yard  just 
three  bits"  (three-eighths  of  a  dollar). 

(3)  The  notion  that  unrestricted  commerce  gives  each  nation 


THE   ECONOMY   OF   LABOR.  235 

simply  all  the  possible  advantage  that  it  can  reap  from  the  more 
advanced  industries  of  others,  and  that  nothing  but  a  fair  profit 
can  be  added  to  the  cost  of  production  and  transportation,  is 
utterly  untenable.  Were  this  the  case,  the  entire  duty  would 
fall  on  the  consumer  from  first  to  last.  But  in  fact,  the  money 
received  into  the  treasury  is  very  largely  drawn  from  the  trader's 
excessive  profits,  and  not  from  the  consumer  in  any  sense. 

Tiie  hencfits  reaped  by  a  nation  from  a  restrictive  policy  may 
he  considered  under  four  heads. 

§  224.  Firstly,  it  is  a  wise  economy  of  the  labor  of  the  people 
Now  the  national  economy  of  labor  consists,  not  in  getting  on 
with  as  little  as  possible  of  it,  but  in  finding  remunerative  em- 
ployment for  as  much  of  it  as  possible.  If  labor  be  the  source 
of  wealth, — and  this  is  one  of  the  few  points  on  which  all  are 
agreed — then  that  country  must  advance  to  wealth  which  has  work 
for  all  who  are  willing  and  able  to  do  it.  To  find  work  for  all  is 
one  of  the  greatest  problems  that  a  nation  has  to  solve  ;  none  has 
yet  attained  to  a  complete  solution  of  it;  but  none  is  so  far  from 
its  solution  as  the  country  in  which  agriculture  is  the  only  em- 
ployment open  to  the  great  mass  of  the  people.  For  farming,  as 
a  rule,  furnishes  employment  only  to  robust  men  and  in  the 
open  air ;  all  others — women,  the  young,  the  sickly — are  left  in 
idleness  and  dependence  upon  the  farming  class. 

In  districts  of  our  own  country,  especially  in  the  South, 
where  agriculture  is  the  only  industry,  a  considerable  portion  of 
the  people  live  on  the  verge  of  starvation  for  want  of  work. 
Maine  was  a  by-word  for  poverty  sixty  years  ago,  when  her 
people  were  either  farmers  or  lumberers.  Since  she  began  to 
use  her  immense  water-power,  she  has  left  many  other  states 
behind  her,  and  has  now  work  for  all  her  people.  Australia  is 
a  young  country,  with  plenty  of  land,  large  natural  resources, 
and  no  excess  of  population,  and  but  a  small  percentage  that  are 
incapable  of  hard  work.  Yet  she  has  been  greatly  perplexed  to 
find  employment  for  that  percentage,  especially  for  the  young. 
A  highly-respectable  farmer  from  Ulster,  who  went  thither  about 
1840;  could  get  nothing  for  his  boys  to  do,  and  actually  made 


236  ELEMENTS    OF   POLITICAL   ECONOMY. 

sailors  of  them  to  save  them  from  idleness  and  worse.  For  this, 
among  many  good  reasons,  most  of  the  Australian  colonies  foster 
home  industries  by  restrictions  on  foreign  trade. 

The  greater  the  variety  of  the  industry  the  more  the  demand 
for  labor  and  the  better  the  laborer  is  paid ;  for  instead  of  two 
workmen  competing  for  every  job,  we  shall  have  two  masters,  two 
sorts  of  masters  running  after  every  workman.  "  There  is  rarely 
competition  for  labor  on  the  part  of  employers  within  a  trade,  in 
a  particular  place,  unless  there  be  competition  for  it  from  with- 
out. And  in  the  absence  of  competition  from  without,  what 
competition  there  is  on  the  part  of  employers  within  a  trade 
often  tends  to  lower  wages  "  (Cliffe  Leslie).  Thus  in  the  north- 
ern and  eastern  shires  of  England,  and  the  three  north-eastern 
counties  of  Ireland,  work  is  far  better  paid  than  in  the  other 
parts  of  those  kingdoms,  because  in  those  agriculture  and  manu- 
factures are  competing  for  labor,  while  elsewhere  there  is  little 
or  nothing  else  than  agriculture.  So  also  in  the  Walloon  pro- 
vinces of  Belgium,  as  compared  with  the  Flanders  provinces. 
In  the  latter  farming  has  been  brought  to  perfection,  but  indus- 
tries exist  only  on  a  petty  scale,  for  want  of  coal  and  water- 
power,  and  there  is  a  considerable  amount  of  misery.  In  the 
Walloon  provinces  farming  is  backward  in  comparison,  but  great 
industries  abound,  wages  are  nearly  twice  as  high,  and  pauperism 
exists  to  hardly  any  extent.  The  notion  that  labor  will  in  such 
cases  transfer  itself  from  the  worse  to  the  better  market,  is  not 
borne  out  by  the  facts.  The  wrench  of  separation  from  familiar 
surroundings  is  terrible  to  the  uneducated  workman,  and  not 
very  agreeable  to  any  one.  If  it  be  made  at  all,  generally  a 
more  distant  field  oflfers  a  still  better  prospect,  and  the  man  emi- 
grates. The  transfer  around  the  world  is  easier  than  from  shire 
to  shire.  Besides,  the  laws  of  many  countries  discourage  the 
latter  transfer,  and  tend  to  reduce  the  laborer  to  the  condition 
of  a  serf,  adscriptus  glehse. 

§  225.  We  sometimes  hear  it  said  in  reply:  "  Skilled  artisans 
are  as  well  off  in  England  under  Free  Trade  as  in  America 
under   Protection.     Their  week's  wages  will   buy  them   more 


PllOTECTION   MODIFIES   LABOR.  237 

broadcloth,  Sevres  china,  fine  cutlery,  &c.,  than  it  would  in 
America."  They  ought  to  be  much  better  off ;  a-  country  that 
possesses  the  vast  capital  that  England  has,  and  can  carry  the 
organization  of  labor  to  the  perfection  it  has  there  reached, 
should  pay  her  workmen  at  rates  with  which  the  rest  of  the 
world  could  not  compete.  We  ought  to  see  a  growing  scarcity 
of  skilled  labor  in  America,  through  the  emigration  of  our 
artisans  thither.  But,  in  fact,  v/e  find  our  workshops  and 
factories  full  of  her  workmen,  and  an  immigration  of  them  to 
America  since  the  restrictive  policy  was  adopted,  such  as  there 
never  was  before. 

But  all  this  is  beside  the  question.  The  question  is  not  be- 
tween free  trade  and  protection,  but  between  the  varied  industry 
which  England  acquired  by  long  persistence  in  protection,  and 
which  she  will  retain  under  any  system,  and  the  want  of  it,  from 
which  we  can  only  be  saved  by  following  England's  example 
rather  than  her  precepts. 

§  226.  Furthermore,  the  creation  of  a  diversified  industry 
introduces  such  a  change  into  farming  itself  as  enables  the  farmer 
to  employ  a  greater  variety  of  labor.  A  home  market  takes  the 
place  of  the  distant  one,  and  crops  are  grown  which  require  more 
care  and  attention,  but  repay  it  with  larger  profits.  Farming 
passes  out  of  its  wasteful  extensive  phase  into  the  intensive  stage, 
in  which  its  operations  are  more  productive  and  profitable.  And 
this  "mixed  farming''  which  pays  best  all  the  world  over,  is  as 
varied  in  the  sorts  of  labor  it  employs  as  in  the  products  of  the 
labor.  Women  and  children  can  now  be  employed,  as  physical 
strength  and  endurance  are  no  longer  the  sole  requisites. 

§  227.  Labor  is  benefited  by  the  restrictive  policy  in  that 
the  increase  of  its  productiveness,  and  consequently  of  its  re- 
muneration, is  thus  made  possible.  We  have  already  seen  the 
natural  progress  of  the  workman  from  wasteful,  thriftless,  me- 
chanical, ill-paid  work,  to  that  which  brings  the  whole  man  into 
service,  mind  as  well  as  muscle,  and  uses  all  his  powers  to  the 
best  advantage  We  have  seen  that  while  both  capitalist  and 
laborer  are  benefited  by  the  transition,  the  laborer  receives  the 


238  ELEMENTS    OF    POLITICAL   ECONOMY. 

larger  share  of  the  benefit,  and  the  power  of  labor  to  command 
the  services  of  capital  (of  the  accumulations  of  past  labor,  that 
is)  grows  steadily  with  the  growth  of  society.  A  country  that 
remains  chiefly  agricultural  calls  only  for  the  lower,  and  lower- 
priced,  sorts  of  labor;  that  which  diversifies  its  industry  creates  a 
demand  for  those  sorts  that  rank  higher  in  their  demands  upon 
human  capacity  and  in  their  rewards  to  industrial  ability.  It  ia 
therefore  the  interest  of  the  laboring  classes,  even  more  than 
of  their  employers,  to  see  to  the  naturalization  of  all  the  ind  is- 
tries  for  which  the  country  has  any  natural  aptitude. 

This  argument  has  especial  force  as  regards  the  people  of  tho 
United  States.  The  natural  drift  and  bent  of  the  American 
character  towards  the  mechanic  arts  and  the  inventions  that 
facilitate  them,  which  a  morning  in  the  U.  S.  Patent  Office 
would  make  clear  to  any  one,  would  find  little  or  no  vent  in  the 
absence,  or  the  undue  subordination  of  the  manufacturing  in- 
dustries. The  strongest  side  of  the  national  intellect  and  the 
brightest  gifts  of  the  people  would  be  thrown  into  the  shade. 

A  comparison  of  our  manufacturing  cities  and  districts  with 
the  city  of  New  York  and  its  working  classes,  discloses  the  fact 
that  wealth  is  far  more  evenly  distributed  where  industry  is  varied. 
In  Philadelphia  and  Pittsburg,  or  Cincinnati,  for  instance,  ther^ 
are  very  few  very  rich  men,  and  the  process  of  accumulating 
largo  fortunes  is  a  slow  one.  But  more  of  the  people  own 
their  own  houses  in  Philadelphia  than  in  any  other  city  of  the 
world.  The  working  men  of  those  cities,  many  of  whom  are 
foreigners,  are  generally  well  off  and  contented  with  their  lot. 
They,  too,  have  a  stake  in  the  stability  and  security  of  society, 
and  taking  the  whole  record,  Philadelphia  has  had  fewer  strikes 
and  lock-outs  than  almost  any  other  city. 

Prof.  Fawcett,  indeed,  has  amused  us  by  informing  the  English  people 
that  "  the  Manchester  of  America  "  has  119,000  paupers,  or  three  times  aa 
many  in  proportion  to  her  population  as  England  has.  The  professor, 
unhappily  for  his  country  and  his  race,  has  lost  his  sight,  and  is  therefore 
dependent  upon  those  who  read  to  him.  By  an  inadvertence  of  some  of 
these,  the  number  of  dollars  expended  in  the  relief  of  the  poor  of  Phila- 
delphia was  transmuted  into  the  number  of  poor  who  receive  relief.    Even 


THE    FARMER    PROTECTED.  239 

that  sum  is  deceptive;  as  good  salaries  are  paid  to  officials  and  the  pau- 
pers are  kept  in  such  stylo  that  gout  is  a  common  disease  at  the  alms- 
house. Philadelphia  has  something  over  throe  thousand  in-door  and 
about  a  thousand  out-door  paupers,  nearly  all  unable  to  work. 

As  to  being  "  the  Manchester  of  America,"  Philadelphia  may  ac  tept 
the  compliment  with  qualification.  She  ranks  above  Manchester  and 
next  to  London  as  a  manufacturing  city. 

And  these  cities  can  claim  no  monopoly  of  prosperity.  In 
Massachusetts,  for  instance,  the  number  who  receive  relief  from 
the  state  is  reduced  ten  per  cent,  since  1855.  The  Boston 
Traveller  says :  "  Fifteen  years  ago  a  visit  to  those  districts  in 
any  of  the  cities  of  the  Commonwealth  that  are  occupied  as 
homes  by  the  working  classes,  revealed  poverty  and  want  in 
marked  contrast  with  their  present  position.  Then,  the  child- 
ren, with  bare  feet  and  half  covered  with  ragged  garments, 
looked  half-starved,  as  they  really  were.  But  to-day  the  visitor 
to  the  same  district  will  find  them  comfortably  clothed  and  shod, 
and  having  a  cheerful  look  that  gives  the  most  unmistakable 
evidence  that  hunger  is  a  stranger  to  them.  The  decrease  in 
pauperism  is  therefore  largely  due  to  the  better  remuneration 
received  by  the  working  classes." 

§  228.  Secondly,  protection  to  industry  is  as  much  needed 
by  the  farmer  as  by  the  manufacturer.  The  farmer,  and  in 
general  all  the  producers  of  the  raw  material  of  our  industries 
and  of  food,  need  direct  protection.  The  excessive  grain  crop 
of  the  West,  as  we  have  seen,  finds  no  outlet  for  more  than  a 
fraction  of  its  amount  in  the  European  markets.  What  becomes 
of  the  bulk  of  it?  It  is  mostly  consumed  by  the  people  of  the 
Eastern  States,  which  might,  but  do  not,  produce  enough  food 
to  feed  themselves.  Perhaps  a  great  multitude  of  Western 
farmers  could  have  found  better  work  on  the  unoccupied  land  in 
the  East;  but  as  things  are,  they  are  secured  the  Eastern  market 
for  Western  products  by  direct  protection.  If  we  had  free  trade 
with  Canada,  the  farmers  of  that  region,  who  pay  little  for  labor 
and  little  for  government,  would  be  glad  to  sell  their  produce  to 
New  York  and  New  England  at  prices  with  which  the  West 
could  hardly  compete.     But  a  tarifi"  on  ftirm  produce  shuts  them 


240  ELEMENTS   OF   POLITICAL   ECONOMY. 

out,  or  keeps  up  prices  so  far  that  the  Western  producer  has  a 
chance. 

So  with  other  producers  of  raw  materials.  Our  coal-mines 
have  to  compete  along  the  seaboard  with  the  mines  of  Nova 
Scotia ;  our  salt-makers  with  the  Liverpool  exporters ;  our  wool 
growers  with  those  of  Canada  and  Europe ;  our  cotton  planters 
once  sought  protection  against  the  West  Indies  and  may  yet  seek 
it  again  against  those  of  Hindoostan ;  our  sugar  planters  are  and 
deserve  to  be  protected.  All  these  industries  are  carried  on 
under  a  weight  of  national  taxation  that  would  make  interna- 
tional free  trade  a  bounty  upon  foreign  importations.  In  every 
case  the  great  body  of  protectionists  and  all  their  leading  thinkers 
have  urged  generous  consideration  of  the  claims  of  this  class  of 
producers. 

A  number  of  New  England  manufacturers  have  indeed  taken  another 
course.  For  the  sake  of  getting  the  raw  materials  of  their  manufacture 
cheaply,  they  urge  that  we  should  admit  free  of  duty  whatever  is  "  repro- 
ductively  consumed,"  and  impose  duties  on  what  is  not.  See  A  Manual 
of  the  Currency,  by  George  A.  Potter,  New  York,  1868. 

§  229.  The  benefits  extended  by  national  legislation  to  agri- 
culture under  the  Nationalist  policy  does  not  stop  at  its  pro- 
tection. It  is  heavily  subsidized  by  the  nation.  The  Pro- 
tectionists voted  the  Homestead  Law,  to  enable  the  farmer  to 
begin  his  occupation  of  new  lands  under  the  most  favorable  con- 
ditions. They  also  have  always  carried  out  the  policy  of  subsidiz- 
ing new  roads  and  railroads,  so  as  to  give  the  farmer  free  access  to 
his  market.  "  A  tariff  and  internal  improvements  "  have  always 
gone  together  in  our  political  war-cries.  The  agricultural  de- 
partment of  the  government  has  been  kept  up  for  the  benefit  of 
the  farmer,  that  a  knowledge  of  the  best  methods  of  work  might 
be  disseminated,  and  new  plants  imported,  acclimatized  and 
scattered  over  the  land.  All  these  proceedings  are  capable  of 
vindication  only  on  the  principle  that  it  is  wise  and  right  for  a 
nation  to  make  sacrifices  to  promote  industry;  on  free  trade 
principles  they  are  wrong. 

§  230.  Just  as  the  laborer's  prosperity  is  measured  by  the 
relation  of  hig  wages  to  current  prices,  and   not   by  the  latter 


THE  farmer's  market.  241 

ilone,  sc  the  farmer's  is  measured  by  the  relation  of  the  prices 
of  raw  and  of  manufactured  goods — including  food  under  the 
former, — and  not  by  the  prices  of  either  one.  Wherever  the 
manufacturer  is  found  at  work,  the  prices  of  the  two  converge; 
wherever  he  is  wanting,  and  the  fiirmer  stands  alone,  their  prices 
diverge.  On  the  Schuylkill,  for  instance,  the  price  of  a  pound 
of  rags  and  that  of  a  pound  of  paper  come  very  near  to  each 
other.  Suppose  there  were  no  paper-mills  elsewhere  in  the 
Union ;  then  as  one  went  west  the  prices  of  the  two  would 
diverge  with  every  mile.  At  the  foot  of  the  Rocky  Mountains 
rags  would  be  as  good  as  worthless,  while  paper  would  bring  a 
far  higher  price  than  in  the  east.  Just  such  is  the  relation  of 
the  price  of  raw  materials  of  all  sorts  as  compared  with  the 
price  of  manufactured  goods  of  all  sorts.  The  points  where  the 
lines  of  price  almost  converge  are  those  at  which  the  one  is 
transformed  into  the  other  by  manufacture.  Free  trade  would, 
not  completely,  but  in  great  measure,  transfer  those  points  to 
the  other  side  of  the  ocean.  Would  the  producer  of  food  and 
of  raw  materials  be  benefited  by  the  transfer  ?  He  would  have 
to  pay  the  heaviest  tax  upon  industry,  the  cost  of  transportation 
in  each  direction.  He  would  spend  two  bushels  of  corn  in  get- 
ting one  to  market,  and  then  pay  in  equal  measure  for  everything 
that  he  needed  to  bring  back  for  his  own  use. 

§  23L  Protection  to  industry  gives  the  farmer  an  abundant 
and  steady  market  for  his  breadstufi*s,  and  creates  a  market  for 
crops  more  remunerative  than  grain.  The  European  market  for 
our  wheat  and  corn  is  furnished  by  England,  and  is  the  most 
unsteady  that  can  be  thought  of.  The  amount  that  is  needed 
depends,  first  of  all,  upon  the  character  of  the  English  harvest, 
which  commonly  furnishes  from  two-thirds  to  three-fourths  of 
what  is  needed.  Then  Mark  Lane  turns  to  the  wheat  crops  of 
the  Baltic  and  the  Ukraine  (and  the  corn  crop  of  Turkey)  to 
supply  the  deficiency,  as  the  English  consumer  prefers  their  round 
hard  grain  to  the  American.  If  they  cannot  get  enough  there, 
they  send  orders  to  the  United  States.  The  farmer  ordinarily 
runs  the  risk  of  a  bad  harvest;  our  farmers  take  the  risk  of 
16 


242  ELEMENTS   OF   POLITICAL    ECONOMY. 

three.  If  two  harvests  abroad  have  been  pretty  bad,  and  that 
at  home  has  been  not  too  good,  he  will  make  money.  Otherwise 
he  may  perhaps  burn  corn  for  fuel,  as  was  frequently  done  in 
free  trade  times.  One  year  England  will  purchase  of  us  seven- 
twentieths  of  all  the  wheat  that  she  needs ;  the  very  next  year 
(1865)  only  one-twentieth.  Her  demand  of  us  fell  in  1872  to 
8  J  million  bushels  from  13  J  millions  in  the  previous  year.  The 
price  varies,  though  not  as  much  as  the  amount,  and  by  no 
means  depends  upon  the  quantity  taken,  but  upon  how  far  that 
comes  up  to  the  supply.  Thus  in  1856  the  quantity  was  nearly 
six  times  as  great  as  in  1869,  and  the  price  was  twice  as  high. 
Worse  still,  the  price  that  England  must  pay  for  the  petty 
quantity  she  takes,  exercises  a  great  influence  upon  that  of  tho 
entire  crop,  destroying  the  stability  of  our  home  market. 

§  232.  The  policy  which  increases  the  number  of  those  who 
are  not  engaged  in  farming,  but  must  live  on  its  products  and 
pay  for  them,  is  that  Which  secures  to  the  farmer  the  best  and 
steadiest  remuneration.  The  average  consumption  of  wheat  in 
America  is  more  than  five  bushels  per  head ;  on  an  average  of 
years  a  native  of  the  British  islands  consumes  about  a  peck  of 
wheat  grown  on  our  soil.  It  will,  surely,  be  the  wisest  way  to 
refuse  to  buy  British  goods,  and  thus  draw  her  workmen  across 
the  ocean  to  manufacture  the  same  articles  here.  It  will  pay 
better  to  feed  them  here  than  at  home,  and  thus  save  the  cost 
of  transporting  both  their  food  and  their  manufactures,  besides 
selling  to  each  of  them  twenty  times  as  much  of  the  former. 
And  besides,  it  will  be  wiser  to  attract  a  multitude  of  our 
own  home  population  to  manufactures,  and  thus  create  a  steady 
home  market  for  food.  Free  traders  urge  the  farmer  to  secure 
the  choice  of  two  markets  to  make  his  purchases  in,  the  homo 
and  the  foreign.  The  American  artisan  has  no  such  choice  of 
two  markets  j  he  must  buy  his  food  at  home.  Even  if  he  lives 
along  the  Canadian  border  he  finds  himself  shut  out  from  that 
market  by  protective  duties  on  American  produce. 

§  233.  This  fact,  that  the  interest  of  the  fttrmer  and  the 
manufacturer  are  identical,  attracted  the  attention  of  Franklin. 


THE   farmer's   home   MARKET.  243 

He  wrote  home  from  London  in  1771:  "  Every  manufacturer 
encouraged  in  a  country  makes  part  of  a  market  for  provisions 
within  ourselves,  and  saves  so  much  money  to  the  country,  as 
must  otherwise  be  exported  to  pay  for  the  manufactures  he 
supplies.  Here  in  England  it  is  well  known  and  understood 
that  wherever  a  manufacture  is  established  which  employs  a 
number  of  hands,  it  raises  the  value  of  land  in  the  neighboring 
country  all  around  it.  It  seems,  therefore,  the  interest  bf  our 
farmers  and  owners  of  land  to  encourage  our  young  manu- 
factures in  preference  to  foreign  ones." 

General  Jackson,  in  a  famous  letter  to  Dr.  Coleman,  puts  the 
case  very  forcibly  :  *'  The  American  farmer  has  neither  a  foreign 
nor  a  home  market,  except  for  cotton.  Does  not  this  clearly 
prove  that  there  is  too  much  labor  employed  in  agriculture  ?  and 
that  the  channels  of  labor  should  be  multiplied.  Common  sense 
points  out  at  once  the  remedy.  Draw  from  agriculture  the 
superabundant  labor,  and  employ  it  in  mechanism  and  manu- 
factures, thereby  creating  a  home  market  for  your  breadstuffs, 
and  distributing  labor  to  a  most  profitable  account,  and  benefits 
to  the  country  will  result.  Take  from  agriculture  in  the  United 
States  600,000  men,  women  and  children,  and  you  at  once  give 
a  home  market  for  more  breadstuflfs  than  all  England  now  fur- 
nishes." 

§  234.  The  creation  of  a  varied  industry  enables  the  farmer 
to  enrich  himself  without  impoverishing  the  soil.  It  does  so  by 
bringing  the  farmer  and  the  artisan  into  neighborhood,  and  giv- 
ing the  former  facilities  for  making  returns  to  the  soil  that  he 
would  not  otherwise  possess.  It  does  so  by  creating  a  demand 
for  less  exhaustive  crops  than  the  great  staples  that  are  needed 
in  the  foreign  market.  It  does  so  by  promoting  the  cattle- 
farming  that  has  turned  large  areas  of  Belgian  peat  and  sand 
into  the  richest  farms  in  the  world.  It  does  so  by  making  it 
worth  while  to  farm  more  carefully,  through  the  certainty  of  a 
permanent  local  market,  rather  than  to  get  out  of  the  soil  as 
fast  as  possible  all  the  easily  accessible  elements,  and  then  move 
on  westward  to  take  up  new  land.     What  has  been  the  history 


244  ELEMENTS   OF   POLITICAL   ECONOMY. 

of  A  ii^Aoafl  agriculture  thus  far?  It  has  mostly  been  the  rob* 
bing  the  soil  of  its  most  valuable  qualities  to  export  its  wealth 
across  the  ocean.  "  In  my  opinion  it  would  be  improper  to 
estimate  the  total  annual  waste  of  the  country  at  less  than  equal 
to  the  mineral  constituents  of  fifteen  hundred  million  bushels  of 
corn.  To  suppose  this  can  continue  is  simply  ridiculous.  As 
yet  we  have  much  virgin  soil,  and  it  will  be  long  ere  we  reap 
the  full  fruits  of  our  improvidence ;  but  it  is  merely  a  question  of 
time.  With  our  earth-butchery  and  prodigality  we  are  each  year 
losing  the  intrinsic  essence  of  our  vitality"  (Geo.  E.  Waring).  In 
some  parts  of  the  country  it  is  no  longer  a  question  of  time. 
Districts  like  the  region  around  Albany  will  now  yield  but  a 
third  the  amount  of  wheat  that  the  first  settlers  got  from  them. 
The  New  Englanders  have  been  the  most  wasteful  of  our  farmers. 
Wherever  they  have  settled,  as  in  western  New  York,  the  soil 
has  been  blighted  under  their  feet.  On  the  other  hand,  the 
grain  farmers  of  eastern  Pennsylvania,  by  their  steady  care  to 
keep  up  the  fertility  of  the  soil,  have  made  their  lands  more 
valuable  with  every  year.  Not  that  their  methods  are  first-rate ; 
any  one  who  has  seen  a  European  farm  knows  how  much  they 
have  to  learn,  especially  on  the  utilization  of  manures.  But  by 
sowing  clover,  a  plant  whose  roots  thrust  themselves  down  to  the 
subsoil  and  take  mineral  sustenance  from  that,  and  by  ploughing 
down  the  clover  with  lime,  the  land  has  been  kept  up  to  a  fair 
degree  of  fertility.  The  possession  of  a  home  market,  however, 
and  the  command  of  the  refuse  of  our  towns  and  factories,  and 
the  opportunity  to  keep  large  numbers  of  cattle  and  to  alternate 
other  crops  with  grain,  have  been  the  chief  cause  of  their  pros- 
perity. The  farmer  who  has  his  market  at  hand,  unless  he  be 
unusually  thriftless  and  wasteful,  can  go  on  year  after  year  im- 
proving the  instrument  by  which  he  makes  his  living ;  he  who 
depends  on  a  distant  market  has  no  choice,  as  he  must  go  on, 
year  after  year,  destroying  it. 

§  235.  Protection  diminishes  the  risk  of  farming  by  giving 
variety  to  its  products.  The  farmer  who  depends  upon  exporta- 
tion puts  all  his  eggs  into  one  basket.     Excessive  rains  or  ex- 


PROTECTION   AND   COMMERCE.  245 

ccssive  droughts,  insects  and  blights,  wage  war  upon  the  few 
staple  articles  that  he  can  find  a  market  for.  If  he  had  the 
consumers  at  hand,  he  could  sell  them  a  great  variety  of  crops ; 
if  one  failed,  the  others  would  ordinarily — not  always — escape. 
Green  crops  flourish  under  the  rainfall  that  ruins  wheat ;  the 
blight  that  spreads  ruin  among  the  grain  is  powerless  over  the 
hay.  The  soil  that  yields  a  poor  and  a  risky  return  for  one 
article  is  just  the  thing  for  another. 

§  236.  Thirdly,  the  people  of  a  nation  reap  a  benefit  from 
the  restrictive  policy,  in  that  it  applies  the  law  of  parsimony  to 
the  number  of  the  commercial  class,  and  to  their  profits. 

A  country  is  wealthy  in  proportion  to  the  amount  of  its  labor 
for  which  it  can  find  productive  employment,  in  directing  either 
the  organic  or  the  formal  changes  of  matter  that  fit  it  for  man's 
use.  But  the  trader  and  those  whom  he  directly  employs  produce 
nothing ;  he  only  contributes  to  the  productiveness  of  labor  by 
saving  the  time  that  the  producer  might  otherwise  waste  in 
seeking  a  purchaser.  The  more  the  service  of  the  trader  is 
needed,  the  less  is  the  net  benefit  derived  from  him,  because  the 
greater  in  that  case  is  the  amount  of  the  tax  he  imposes  upon 
the  article  on  its  way  from  the  producer  to  the  consumer.  This 
tax  is  ordinarily  greatest  when  the  distance  between  the  pro- 
ducer and  the  consumer  is  greatest,  and,  as  we  have  seen,  is  in 
that  case  not  limited  to  the  cost  of  transportation  and  a  fair 
profit  for  his  services.  By  practices  and  methods,  of  which  arti- 
ficial scarcities  are  but  extreme  instances,  the  price  of  the  goods 
that  he  transmits  is  lowered  or  raised  at  pleasure,  either  to 
destroy  competition  in  the  market  where  he  sells,  or  to  reap  the 
large  profits  that  far  more  than  repay  him  for  that  and  other 
sacrifices.  That  these  profits  are  ordinarily  excessive  in  the 
absence  of  home  competition  is  evident  from  the  fact  that  he 
can  afford  to  pay  a  considerable  share  of  the  protective  duties 
designed  to  create  home  competition. 

The  restrictive  policy  brings  the  producer  and  the  consumer 
into  neighborhood,  and  thus  diminishes  their  need  of  the  trader, 
and  weakens  his  power  over  them.     The  heavy  tax  of  trans- 


246  ELEMENTS   OF   POLITICAL   ECONOMY. 

portation  is  saved ;  men  are  set  free  from  that  most  laborious 
and  unproductive  of  occupations  to  engage  in  others  which  are 
productive,  and  which  this  very  policy  has  called  into  existence. 
The  buyers  of  an  article  are  no  longer  dependent  upon  the 
trader  as  to  the  price  they  will  pay ;  if  it  be  exorbitant,  they 
can  go  direct  to  the  producer.  The  market  can  no  longer  be 
forestalled,  because  the  great  and  necessary  commodities  are  no 
longer  concentrated  in  a  few  hands,  but  pass  in  much  smaller 
parcels,  and  through  much  fewer  hands,  from  those  who  produce 
them  to  those  who  need  them. 

§  237.  Not  that  this  policy  destroys  international  commerce ; 
it  only  transforms  it  and  makes  it  more  equitable.  From  an 
exchange  of  raw  materials  for  manufactured  goods,  it  raises  it 
to  an  exchange  of  manufactured  goods  on  each  side.  Even  if 
the  value  of  international  exchanges  is  not  reduced — and  pro- 
tection ofKin  increases  them — their  bulk  and  the  cost  of  their 
transportation  are  reduced,  and  that  very  decidedly.  Men  have, 
thereby,  more  power  to  command  the  use  of  ships,  and  less  need 
to  use  them.  It  gives  men  at  once  more  power  over  ships,  and 
ships  less  power  over  men — which  is  the  law  of  progress 
in  regard  to  the  instruments  of  wealth.  It  restores  the  equili- 
brium of  foreign  exchange,  and  puts  an  end  to  the  export 
of  specie  from  the  poorer  to  the  wealthier  countries,  retaining  it 
where  it  is  most  needed  by  increasing  its  utility  and  purchasing 
power. 

A  country  that  continually  develops  native  wealth  and  in- 
dustry by  a  consistent  Nationalist  policy  grows  in  power  to  pur- 
chase those  articles  that  its  own  manufactures  do  not  yet  supply, 
or  that  can  only  be  produced  in  another  climate  than  its  own. 
The  country  that  has  the  most  diversified  industry  is  best  able 
to  patronize  the  finer  industries  of  other  countries.  The  servant 
girls  of  the  Northern  States  before  the  war  bought  more  English 
silks  than  did  the  slaveholding  aristocracy  of  the  South.  Every 
country  that  carries  on  an  unrestricted  trade  with  another  much 
richer  than  itself,  purchases  a  less  and  less  valuable  class  and 
amount  of  goods  with  every  generation,  till  at  last  its  demand 


COMPLAINTS   OF   THE   TRADING    CLASS.  217 

counts  for  nothing  in  the  markets  of  the  other.  In  so  fur  as  a 
richer  country  persuades  the  poorer  ones  to  follow  this  policy,  she 
herself  hecomes  loss  of  a  workshop  and  more  of  a  mart  3  their 
raw  products  pass  through  her  ports  and  factories  with  ever  less 
of  elaboration  and  an  ever  greater  diminution  in  their  amount. 
From  carrying  on  commerce  vyith  the  world  she  sinks  to  the 
position  of  a  nation  of  shopkeepers  and  traders  which  carries  on 
commerce  for  the  world. 

The  relations  of  Ireland,  Portugal  and  Turkey  to  Entjland  illustrate 
what  we  mean.  See  next  chapter.  England's  very  best  customers  are 
the  Protectionist  nations. 

§  238.  The  numbers  and  the  prosperity  of  our  own  trading 
class  that  are  engaged  in  foreign  commerce  show  that  the  pro- 
tective policy  has  not  extinguished  that  occupation.  They  show 
likewise  that  the  profits  of  manufacture  under  protection  are  not 
BO  great  as  to  cause  an  excessive  diversion  of  capital  in  that 
direction. 

If  we  were  to  listen,  indeed,  to  the  complaints  of  some  of  this 
class,  we  should  infer  in  them  either  a  great  want  of  common  sense, 
or  a  sublime  disregard  of  their  own  interests.  They  complain, 
without  courting  any  comparison  of  their  ledgers,  that  the 
profits  of  the  manufacturing  class  are  inordinately  great, — that 
two  or  three  hundred  per  cent,  per  annum  are  reached  in  this  or 
that  line  of  production.  Then,  why  not  leave  importing  and  go 
to  manufacturing?  Oh,  they  are  too  moral!  "Those  who 
believe  that  a  legal  monopoly  is  a  system  of  robbery  protest 
against  it  on  principle,  and  do  not  want  to  share  its  ill-got  gains  " 
{Evening  Post).  Or  if  this  be  incredible  there  is  another  reason. 
"  The  profits  are  so  precarious  that  before  the  year  is  up  we  may 
lose  everything  by  a  reduction  of  the  tariff"  (Ibidem).  There 
would  be  very  little  danger  of  a  reduction  were  it  not  for  the 
zealous  warfare  that  these  gentlemen  wage  upon  the  tariff.  If 
our  manufactures  are  an  unsafe  investment,  it  is  they  who  make 
thoni  so.  In  doing  so  they  not  only  keep  those  profits  up,  if 
they  are  high,  by  checking  the  flow  of  capital  in  that  direction, 
but  mak  J  those  (supposed)  high  profits  right  and  reasonable,  as 


248  ELEMENTS    OF   POLITICAL    ECONOMY. 

covering  not  only  a  fair  return  for  the  invested  capital  but  a  fail 
insurance  for  the  risk  thus  created. 

§  239.  Fourthly,  and  especially,  the  restrictive  policy  fosters 
and  encourages  the  growth  of  manufactures,  and  is  often  the 
only  way  to  create  a  varied  industry  in  a  new  or  a  poor  country 
that  does  not  possess  it. 

In  imposing  a  protective  duty  upon  the  products  of  foreign 
manufacture,  the  aim  is  not  dearness  or  scarcity,  but  the  reverse. 
Prohibitory  duties  or  the  legal  monopoly  of  a  manufacture  by  a 
few  persons  might  produce  a  scarcity;  but  protective  duties 
operate  in  exactly  the  contrary  direction. 

If  dearness — and  we  measure  that  by  the  labor-cost  always— 
were  to  be  the  result,  and  even  the  permanent  result  of  such  a 
policy,  it  might  yet  be  vindicated  as  a  wise  measure,  for  all  the 
reasons  we  have  already  specified, — reasons  that  relate  to  the 
economy  of  labor,  of  agriculture,  and  of  commerce. 

But  a  rise  in  price  can  be  but  a  temporary  result  of  the  pro- 
tective duty,  while  only  prohibitory  duties  can  create  scarcity. 
And  even  if  we  leave  out  of  view  those  compensatory  advantages 
that  accrue  to  the  community  from  the  first,  the  temporary  sacri- 
fice involved  in  the  temporary  increase  of  price  is  a  measure  of 
wise  policy  quite  in  the  line  of  the  best  statesmanship  in  other 
fields  of  national  life. 

The  establishment  of  a  post  office,  which  in  a  country  like  the 
United  States  will  not  pay  for  itself  for  centuries  to  come,  is  a 
measure  whose  wisdom  none  disputes.  It  binds  the  people  in 
one,  promotes  intelligence,  helps  the  popular  education,  renders 
services  that  far  outweigh  its  cost.  Yet  a  consistent  free  trader 
must  oppose  the  measure,  as  taxing  the  mass  of  the  people  for 
the  benefit  of  the  classes  who  use  the  post  office;  if  he  defended 
it,  it  would  be  on  grounds  of  indirect  benefit  that  would  justify 
a  like  sacrifice  in  the  protection  of  home  industry. 

Our  public  school  and  college  system  is  another  instance  of 
this.  Consistent  free  traders,  like  Herbert  Spencer  and  Gerritt 
Smith,  must  oppose  the  measure.  It  is  taxing  all  classes  for  thts 
benefit  of  one  class  of  "  producers,"  the  fathers  and  mothers; 


WISE   NATIONAL  SACRIFICES.  219 

it  is  the  expenditure  of  public  money  for  other  ends  than  those 
of  police  at  home  and  defence  abroad.  It  can  only  be  justified 
on  the  ground  that  it  pays  in  the  long  run,  and  indirectly  to  all 
classes,  as  protection  does.  And  protection  itself,  as  Mr.  Mill 
very  forcibly  puts  it,  is  a  method  by  which  producers  are  "  edu- 
cated up  to  the  level  of  those  with  whom  the  processes  have 
become  habitual." 

Not  only  the  education,  but  the  rearing  of  children,  which 
the  Christian  state  Imposes  upon  the  parents  by  its  laws  to  give 
perpetuity  to  the  relationship  of  marriage,  and  to  punish  in- 
fanticide, is  a  business  involving  large  sacrifices  for  an  ultimate 
benefit.  Were  not  the  natural  afi"ections  too  strong  for  logic,  we 
might  have  zealous  advocates  of  free  trade  urging  men  to  give 
up  this  wasteful  business,  and  import  full-grown  men  and 
women  from  Europe,  where  they  are  to  be  had  so  cheap. 

In  short,  wherever  we  turn  we  find  the  farsightedness  that 
makes  the  sacrifice,  and  the  nearsightedness  that  refuses  to  make 
it,  set  over  against  one  another,  and  the  one  approved  as  wisdom 
by  the  consent  of  mankind,  which  rejects  the  other  as  folly. 

§  240.  Protection,  adopted  for  these  ends,  has  the  sanction  of 
nearly  all  the  great  free  trade  authorities.  Adam  Smith  con- 
ceded that,  "by  means  of  such  regulations,  indeed,  a  manufacture 
may  sometimes  be  acquired  sooner  than  it  could  have  been  other- 
wise, and  after  a  certain  time  may  be  made  as  cheap  or  cheaper 
than  in  the  foreign  country."  His  chief  French  disciples  are 
Say,  Blanqui,  Rossi,  and  Chevalier.  Say  taught  that  "  pro- 
,tection  granted  with  a  view  to  promote  the  profitable  ap- 
plication of  labor  and  capital  might  be  productive  of  universal 
benefit.  New  modes  of  employment,  though  destined  to  result 
in  great  advantage  when  the  workmen  have  been  trained  and 
the  preliminary  obstacles  surmounted,  were  liable,  without  the 
aid  of  government,  to  cause  heavy  loss  to  the  undertaker — a 
result  carefully  to  be  avoided."  Blanqui  writes  that  "  experience 
has  already  taught  us  that  a  people  ought  never  to  deliver  over 
to  the  chances  of  foreign  trade  the  fate  of  its  manufactures." 
Hoasi  declared  that  ''  in  the  conduct  of  a  nation,"  as  in  that  of 


250  ELEMENTS   OF    POLITICAL   ECONOMY. 

a  family,  sacrifices  needed  to  be  made  in  the  hope  of  therebj? 
opening  "  new  roads  to  affluence/'  Chevalier  declares  that 
*'  every  nation  owes  to  itself  to  seek  the  establishment  of  diversi- 
fication in  the  pursuits  of  its  people,  as  Germany  and  England 
have  already  done  in  regard  to  cottons  and  woollens,  and  as 
France  herself  has  done  in  reference  to  so  many  and  so  widely 
diiferent  departments  of  industry ;"  that  this  "  is  not  an  abuse 
of  power  on  the  part  of  the  government ;  on  the  contrary,  it  is 
the  accomplishment  of  a  positive  duty  which  required  it  so  to 
act  at  each  epoch  in  the  progress  of  a  nation  as  to  favor  the 
taking  possession  of  all  the  branches  of  industry  whose  acquisi- 
tion is  authorized  by  the  nature  of  things.  Governments  are, 
in  eflfect,  the  personification  of  nations,  and  it  is  required  that 
they  should  exercise  their  influence  in  the  direction  indicated  by 
the  general  interest,  properly  studied  and  fully  appreciated." 
And  in  his  opinion,  "  combination  of  varied  effort  is  not  only 
promotive  of  general  prosperity,  but  is  the  one  and  only  condi- 
tion of  national  progress." 

All  these  gentlemen  belong  to  the  free  trade  school,  especially 
Chevalier.  So  does  John  Stuart  Mill,  who  is  of  the  opinion 
that  "  the  superiority  of  one  country  over  another  in  a  branch 
of  industry  often  arises  only  from  it  having  begun  it  sooner.  A 
country  which  has  this  skill  and  experience  to  acquire  may  in 
other  respects  be  better  adapted  to  the  production  than  those 
earlier  in  the  field ;  and,  besides,  it  is  a  just  remark  that  no- 
thing has  a  greater  tendency  to  produce  improvement  in  any 
branch  of  production  than  its  trial  under  a  new  set  of  conditions. 
But  it  cannot  be  expected  that  individuals  should  at  their  own 
risk,  or  rather  to  their  certain  loss,  introduce  a  new  manufacture 
and  bear  the  burthen  of  carrying  it  on  until  the  producers  have 
been  educated  up  to  the  level  of  those  with  whom  the  processes 
have  become  traditional.  A  protecting  duty  continued  for  a 
reasonable  time  will  sometimes  be  the  least  inconvenient  mode 
In  which  a  country  can  tax  itself  for  the  support  of  such  an 
experiment." 

Mr.  (Joo.  W.  Smallcy  (of  The  N.   Y.  Trihanc)  awkcd  Mr.  Mill  during 
his   later  years,  "  whether  ho  still  adhered   to  this   stateuieut  ?"     "  Cer- 


MR.  J.  S.  MILL   ON    PROTECTION.  251 

tainly,"  was  his  answer;  "I  have  never  affirmed  anything  to  the  con- 
trary. I  do  not  presume  to  say  that  the  United  States  miy  not  find 
protection  expedient  in  their  present  state  of  development.  I  do  not 
even  say  that  if  I  were  an  American  I  should  not  be  a  protectionist." 

If  there  be  any  doubt  as  to  the  practical  bearing  of  these 
concessions,  especially  the  last,  it  is  dispelled  by  Prof.  Thorold 
Kogers  :  **  Few  statements  made  by  any  writer  have,  I  am  per- 
suaded, been  more  extensively,  though  unintentionally,  mis- 
chievous than  this  admission  of  Mr.  Mill.  The  passage  has 
been  quoted  over  and  over  again  in  the  United  States,  and  in 
the  British  colonies,  as  a  justification  of  the  financial  system 
which  these  communities  have  adopted.  The  circumstances  in 
which  they  are  situated  exactly  square  with  the  hypothesis  of 
Mr.  Mill.  The  countries  are  young  and  rising, — industries,  as 
yet  nascent,  are  thoroughly  suited  to  the  natural  capacity  of  the 
region  and  of  the  people ;  the  latter  being  of  the  same  stock 
with  the  mother  country  whose  manufactures  they  prohibit  and 
discourage.  There  is  no  reason,  apparently,  except  that  of 
priority  in  the  market,  why  the  industry  of  the  old  country 
should  not  be  transplanted  to  the  new.  Hence,  I  repeat,  Mr. 
Mill's  concession  is  perpetually  quoted,  and  is  perpetually  mis- 
chievous." Protectionists  may  now  cease  quoting  Mr.  Mill,  and 
begin  to  quote  Prof.  Thorold  Rogers. 

§  24L  The  object  and  the  eflFectof  protective  duties,  then,  is 
to  enable  the  home  producer  to  furnish  the  manufactured  goods 
more  plentifully  and  cheaper  than  before  the  duty  was  imposed. 
"  Though  it  were  true,"  says  Alexander  Hamilton,  "  that  the 
immediate  and  certain  effect  of  regulations  controlling  the  com- 
petition of  foreign  with  domestic  fabrics  was  an  increase  of 
price,  it  is  universally  true  that  the  contrary  is  the  ultimate 
effect  of  every  successful  manufacture.  When  a  domestic  manu- 
facture has  attained  to  perfection,  and  has  engaged  in  the  prose- 
cution of  it  a  competent  number  of  persons,  it  invariably 
becomes  cheaper.  Being  free  from  the  heavy  charges  which 
attend  the  importation  of  foreign  commodities,  it  can  be  afforded 
cheaper,  and  accordingly  seldom  or  never  fails  to  be  afforded 
cheaper  in  process  of  time  than  was  the  foreign  article  for  which 


252  ELEMENTS   OF   POLITICAL   ECONOMY. 

it  is  the  substitute.  The  internal  competition  which  takes  place 
Boon  does  away  everything  like  monopoly,  and  by  degrees  re- 
duces the  price  of  the  article  to  the  minimum  of  a  reasonable 
profit  on  the  capital  employed." 

So  well  ascertained  and  so  necessary  is  this  result  as  regards 
the  profits  of  manufacture  that  Prof.  Thorold  Rogers  alleges  it 
as  a  reason  against  protection  :  "■  Unless  the  state  were  to  go  so 
far  as  to  grant  a  monopoly  of  production  to  one  or  a  few  indi- 
viduals whom  it  protects,  it  could  not  prevent  the  operation  of 
that  economic  law  which  reduces  profits,  other  things  being 
equal,  to  an  equality.  Manufacturers  crowd  into  the  protected 
occupation,  and  the  benefit  intended  to  be  secured  by  the  policy 
of  the  government  is  distributed  and  annihilated  by  competi- 
tion." Mr.  Rogers  does  not  seem  to  be  aware  that  this  is  the 
very  ''  benefit  intended  to  be  secured."  But  we  have  his  word 
as  to  how  that  policy  does  and  must  work, — above  all  that  it 
involves  no  monopoly. 

"  Competition  being  always  free,"  says  McCulloch,  "  among 
home  producers,  the  exclusion  of  any  particular  species  of  foreign 
manufactured  goods  cannot  elevate  the  profits  of  those  who  pro- 
duce similar  articles  at  home  above  the  common  level,  and 
merely  attracts  as  much  additional  capital  to  that  particular 
business  as  may  be  required  to  furnish  an  adequate  supply  of 
goods." 

Neither  of  these  two  authors,  it  will  be  perceived,  concedes  that  prices 
are  brought  down  by  protection  to  the  foreign  rate  ;  but  they  both  show 
that  the  foolish  clamor  as  to  the  excessive  profits  of  the  protected  manu- 
facturer has  nothing  to  go  upon.  Mr.  D.  A.  Wells  flatly  contradicts  hia 
English  teachers  when  he  says  :  "  It  not  unfrequently  happens  that  the 
imposition  of  a  tax  in  the  form  of  a  tariff  on  an  imported  article  is  made 
the  occasion  for  very  greatly  and  unnecessarily  advancing  the  price  of  a 
corresponding  domestic  product." 

§  242.  What  are  the  reasons  for  this  final  reduction  in  price  ? 
It  is  because  the  obstacles  to  cheap  production  have  been  over- 
come, and  the  home  producers  are  competing  for  the  home 
market.  These  obstacles  are  manifold.  (1)  The  lack  of  se- 
curity deters  the  manufacturer  from  putting  his  capital  into  a 
large  undertaking,     lie  has  to  make  great  outlays,  great  sacri- 


England's  industrial  warfare.  253 

fices  even,  but  he  has  no  security  that  he  will  ever  reap  the 
fruits,  unless  the  home  market  is  secured  to  him.  He  fears  the 
foreign  competition  more  than  that  of  his  competitors  at  home, 
because  the  latter  stand  on  an  equality  of  power  and  capacity 
with  him,  while  the  former  are  able  and  ready  to  make  large 
sacrifices  simply  to  drive  him  out  of  the  market  and  secure  it  to 
themselves.  It  is  not  a  matter  as  to  which  we  are  left  in  any 
doubt  that  artificial  fluctuations  are  produced  for  this  purpose. 
"  It  has  already  been  shown,"  says  Coleridge  in  1834,  "  in  evi- 
dence which  is  before  all  the  world,  that  some  of  our  manu- 
facturers have  acted  upon  the  accursed  principle  of  deliberately 
injuring  foreign  manufacturers,  if  they  can."  "  Experience," 
says  Blanqui,  one  of  the  free  trade  economists  of  France,  "  has 
already  taught  us  that  a  people  ought  never  to  deliver  over  to 
the  chances  of  foreign  trade  the  fate  of  its  manufactures." 

A  report  presented  to  the  British  Parliament  in  1864  by  a  commission 
appointed  to  investigate  the  state  of  industry  in  the  mining  districts 
says  ; — 

*'  The  laboring  classes  generally  in  the  manufacturing  districts  of  this 
country,  and  especially  in  the  iron  and  coal  districts,  are  very  little  aware 
of  the  extent  to  which  they  are  often  indebted  for  being  employed  at  all 
to  the  immense  losses  which  their  employers  voluntarily  incur  in  bad 
times  in  order  to  destroy  foreign  competition,  and  to  gain  and  keep 
possession  of  foreign  markets.  Authentic  instances  are  well  known  of 
employers  having,  in  such  times,  carried  on  their  works  at  a  loss  amount- 
ing in  the  aggregate  to  £300,000  or  £400,000  in  the  course  of  three  or 
four  years. 

"  If  the  efforts  of  those  who  encourage  the  combinations  to  restrict  th« 
amount  of  labor  and  to  produce  strikes  were  to  be  successful  for  any 
length  of  time,  the  great  accumulations  of  capital  could  no  longer  be 
made  which  enable  a  few  of  the  most  wealthy  capitalists  to  overwhelm 
all  oreign  competition  in  times  of  great  depression,  and  thus  to  clear  the 
way  for  the  whole  trade  to  step  in  when  prices  revive,  and  to  carry  on  a 
great  business  before  foreign  capital  can  again  accumulate  to  such  an  ex- 
tent as  to  be  able  to  establish  a  competition  in  prices  with  any  chance  of 
success. 

"  The  great  capitals  of  this  country  are  the  great  instruments  of  war- 
fare against  the  competing  capital  of  foreign  countries,  and  are  the  most 
essential  instruments  now  remaining  by  which  our  manufacturing  su- 
premacy can  be  maintained  ;  the  other  elements^-cheap  labor,  abundance 
of  raw  materials,  means  of  communication,  and  skilled  labor — being 
rapidly  in  process  of  being  equalized." 


254  ELEMENTS    OF    POLITICAL   ECONOMY. 

So  much  for  Tennyson's 

"...  fair,  white-winged  peace-maker." 
A  greater  poet  had  some  excuse  for  making  his  Eaust  say  :— 

"  Krieg,  Handel  nnd  Piruterie 
Dreieimg  sind  aie,  nicht  zti  trennen." 

§  243.  (2)  The  inexperience  of  the  laboring  class  is  not  to  be 
overcome  in  a  day.  Their  lack  of  skill  involves  difficulties  and 
losses  ;  their  industrial  education,  like  all  education,  is  an  invest- 
ment that  pays  only  in  the  long  run.  The  unprotected  manu- 
facturer is  a  captain  of  industry  who  must  drill  his  men  under 
fire,  must  expect  to  fight  with  them  from  the  first  day  that  he 
enlisted  them.  Foreign  operatives,  indeed,  can  be  secured  in 
some  branches  and  for  positions  that  require  special  skill.  The 
non-commissioned  officers  of  the  industrial  army  may  therefore 
be  men  of  some  experience,  but  the  rank  and  file  employed  in  a 
new  industry  are  raw  recruits.  But  when  once  the  army  has 
learnt  its  drill,  work  becomes  as  efi"ective  as  anywhere  else,  and 
the  labor-cost,  and  with  it  the  labor-price  of  production,  is  as 
low  as  elsewhere,  and  lower  at  home,  as  the  cost  of  transportation 
and  the  profits  of  a  long  string  of  middlemen  are  no  longer 
added  to  the  price  while  the  article  is  on  its  way  from  the  pro- 
ducer to  the  consumer. 

And  the  captains  of  industry  themselves  need  drill  and  ex- 
perience as  well  as  their  workmen.  The  processes  of  a  great 
manufacture  are  not  to  be  learnt  in  a  day,  even  if  no  changes  in 
method  are  contemplated.  But  among  the  great  advantages 
gained  in  the  acclimatization  of  new  industries,  not  the  least  is 
the  gain  in  improved  methods  when  an  old  industry  is  tried 
under  a  new  set  of  conditions.  Many  of  the  most  notable  labor- 
saving  inventions,  beginning  with  Whitney's  cotton-gin,  owe 
their  existence  to  the  efi'orts  of  those  who  were  engaged  in 
prosecuting  new  and  protected  industries.  Such  has  been  the 
history  of  the  sugar  manufacture  in  Europe,  which  now  actually 
pays  duties  that  discriminate  in  favor  of  cane  sugar  from  the 
West  Indies,  and  yet  partly  supplies  even  the  English  demand 
The   great   advances   made  in  the  application  of  chemistry  to 


PROTECTION   CHEAPENS.  255 

manufactures,  date  from  the  efforts  of  Napoleon  to  make  the  Con- 
tinent independent  of  England.  Thirty  years  ago  Dr.  Wayhind 
entered  his  protest  against  the  duties  that  discriniinaied  in  favor 
of  home-made  cutlery,  since  "  not  a  thousandth  part  of  the 
cutlery  used  is  made  here."  Since  then,  by  the  invention  of 
new  machines,  P^ngland  is  actually  surpassed  in  the  production 
of  all  but  the  finest  varieties. 

The  Spectator  (London)  declares  that  the  new  manufactures 
in  Bengal  will  in  a  few  years  be  strong  enough  to  hold  their  own 
against  English  competition,  but  that  at  present,  or  so  long  aa 
"  coal  is  dear,  and  the  habit  of  manvfacture  upon  the  large  scale 
not  yet  fonned^^  the  removal  of  high  duties  would  cause  them 
first  to  languish  and  then  to  die  out,  as  the  native  manufactures 
of  India  did  half  a  century  ago. 

An  English  Trade  Circxdar  of  1871  says:  "Every  Canadian  season 
affords  unmistakable  evidence  that  some  additional  article  in  English 
hardware  is  being  supplanted  by  the  produce  of  the  Northern  States,  and 
it  is  notorious  -how  largely  American  wares  are  rivalling  those  of  the 
mother  country  in  other  of  our  colonial  possessions,  as  well  as  upon  the 
Continent.  The  ascendancy  of  the  Protectionist  party  in  the  States  con- 
tinues to  operate  most  favorably  for  the  manufacturing  interest  there,  and 
it  is  no  wonder  that,  under  such  benignant  auspices,  the  enterprise  in 
this  direction  is  swelling  to  colossal  proportions." 

§  244.  (3)  The  complete  organization  of  industry,  and  the 
accumulation  of  the  capital  that  make  it  possible,  are  noteflfected 
in  a  day.  It  is  a  commonplace  of  the  economists  that  the  pro- 
ducts of  industry  are  cheapened  by  extending  the  scale  of  pro- 
duction. Very  often  a  manufacture  already  existing  in  the  face 
of  unrestricted  foreign  competition  is  carried  on  in  a  small, 
feeble  and  costly  way  for  lack  of  assurance  as  to  a  large  demand 
for  it.  But  as  soon  as  protection  gives  it  that  assurance  the 
production  is  doubled,  trebled,  quadrupled, — and  the  price  is 
pulled  down  to  less  than  the  previous  selling  rates  instead  of 
increasing  by  the  amount  of  the  duty  imposed.  Thus  the  selling 
price  of  American  cottons  fell  after  the  tariff  of  1842  imposed  a 
heavy  duty  on  English  cottons,  instead  of  rising.  Something 
of  the  same  sort  in  the  hardware  trade  was  evidenced  by  an 


256  ELEMENTS    OF    POLITICAL   ECONOMY. 

English  circular  of  that  year  offerino;  hardware  at  rates  that- 
after  paying  the  new  duties  would  still  be  a  little  lower  than 
they  had  been  before.  The  same  was  the  case  with  the  price  of 
starch,  and  doubtless  with  many  other  articles,  which  at  once 
began  to  be  made  in  large  quantities  instead  of  small.  Mr. 
Greeley  illustrates  this  by  the  case  of  a  newspaper ;  double  its 
circulation,  and  the  publisher  can  afford  a  better  paper  at  a  less 
price. 

§  245.  Much  is  often  made  by  the  opponents  of  protection  of 
a  case  in  which  the  adjustment  of  duties  is  exceedingly  difficult. 
It  may  be  desirable  to  protect  both  the  production  of  the  raw 
material  and  of  the  finished  product  of  an  industry.  This  occurs 
more  frequently  elsewhere  than  in  our  own  country,  but  the  case 
of  the  woollen  and  iron  industries  brings  this  within  the  number 
of  our  tariff  problems.  Our  present  tariff  on  wools  and  woollens 
was  adjusted  on  a  basis  agreed  to  by  a  joint  convention  of  wool- 
growers  and  wool-manufacturers,  but  it  is  complained,  by  a  small 
minority  of  the  latter,  that  it  forces  them  to  pay  an  exorbitant 
price  for  certain  grades  of  foreign  wool  which  they  must  have 
to  mix  with  native  wool  for  the  production  of  some  classes  of 
goods ;  and  that  the  protection  accorded  them  by  duties  on  the 
goods  is  nullified  by  the  duties  on  wool.  The  same  complaint  is 
made  by  some  manufacturers  who  need  a  large  supply  of  steel  and 
iron,  and  who  say  that  the  steel  that  they  can  buy  in  the  Ameri- 
can market  is  inferior,  or  the  iron  too  dear.  These  complaints 
may  or  may  not  have  foundation  in  fact,  but  the  true  remedy 
seems  to  be  the  higher  protection  of  the  manufactured  goods, 
rather  than  the  proposed  "  removal  of  duties  from  articles  re- 
productively  consumed."  The  difficulty  will  disappear  as  the 
production  of  these  raw  materials  of  the  manufacture  is  brought 
nearer  perfection  ;  and  no  one  that  believes  in  protection  could 
consistently  seek  its  solution  in  the  removal  of  duties. 

In  conclusion,  a  formal  answer  to  a  few  of  the  nnore  common 
objections  may  not  be  out  of  place. 

§  246.  (1)  "  Protection  discriminates  against  the  consumer, 
in  favor  of  the  producer."    Who  this  consumer  is,  that  is  neither 


WHAT   IS    HIS    INTEREST?  257 

a  producer  as  well,  nor  directly  dependent  upon  the  prosperity  of 
other  people  who  are  producers,  is  hard  to  say.  Ills  name  and 
the  niysteriousness  of  his  character  would  seem  to  indicate  that 
he  is  the  Devil.  But  most  likely  he  is  an  innocent  ens  logicum^ 
manufactured  by  the  same  process  of  abstraction  by  which  the 
economists  devised  their  economical  man — "  a  covetous  machine, 
inspired  to  action  only  by  avarice  and  the  desire  of  pro- 
gress." That  is,  they  cut  away  or  stole  away  (abstracted)  the 
better  half  of  the  real  being,  and  persisted  in  treating  the 
remaining  human  fragment  (if  we  can  call  it  human)  as  a  living 
reality.  "The  consumer"  always  buys  and  never  sells — has  no 
soul  and  no  patriotism — has  no  interest  but  the  cheapness  of 
commodities — belongs  to  none  of  the  classes  that  make  up  the 
industrial  state.  His  sole  function  in  life  is  to  devour  the  result 
of  other  men's  labors,  but  he  adds  nothing  himself  to  the  sum 
of  the  utilities  that  make  wealth.  There  may  be  a  few  excep- 
tional persons  in  the  nation  that  deserve  to  be  called  mere  con- 
sumers—/ri/^es  consumere  nati — but  that  the  national  policy  is  to 
be  for  ever  directed  in  accordance  with  the  interests  of  an  insig- 
nificant and  useless  class,  is  a  large  assumption.  And  that  their 
interest  lies  in  the  direction  of  dependence  upon  the  farther 
producer,  instead  of  the  nearer,  we  have  seen  reason  enough 
to  doubt.  "  The  consumer"  must  be  as  short-sighted  as  he  is 
hard  to  find,  if  he  thinks  it  does. 

It  is  said  that  "  the  interest  of  the  consumer  is  the  interest  of 
society,  while  that  of  the  producer  is  the  interest  of  a  class."  The 
interest  of  the  mere  consumer  is  in  mere  cheapness.  His  interest 
must  be  best  secured  in  a  condition  of  business  and  industry  in 
which  prices  are  the  lowest  and  the  producers  are  underbidding 
each  other  for  customers.  But  that  condition  is  found  in  what 
are  called  hard  times.  Either  such  times  are  a  golden  age,  for 
whose  coming  we  should  pray,  or  the  interest  of  the  mere  "  con- 
sumer "  and  that  of  society  are  not  identical. 

§  247.   (2)  "  But  it  is  every  one's  interest — his  money  inte- 
rest, at  least — to  buy  in  the  cheapest  market,  and  sell  in  the 
dearest  he  has  access  to."     Suppose  that  his  buying  in    the 
17 


258  ELEMENTS    OF    POLITICAL   ECONOMY. 

cheapest  market  makes  the  difference  of  his  having  no  dearest 
market  to  sell  in,  but  only  a  cheapest  market  for  that  purpose  also. 
Then  manifestly  his  interest  is  found,  if  he  have  anything  to 
sell,  be  it  sweat  of  brow  or  of  brain,  be  it  wares  or  provisions, 
in  the  comparative  rates  of  the  two  markets.  Free  trade  simply 
forces  him — forces  all  the  producers  in  the  country — to  buy  in 
the  markets  that  now  exist,  be  they  good  or  bad,  without  giving 
them  either  right  or  power  to  create  a  new  and  a  better  market 
than  any  that  exists. 

The  sole  interest  of  a  man  is  not  in  the  spending  the  money 
he  has  now  in  his  pocket,  be  it  great  or  small.  A  larger  interest 
for  him  is  the  getting  more  to  replace  it.  And  then  the  interest 
of  those  who  have  empty  pockets,  of  the  unemployed  laborers 
of  a  country,  runs  still  more  strongly  in  the  same  direction. 
Terence  could  buy  "  as  much  for  a  shilling  in  Ireland  as  he  can 
here  for  a  dollar."  Why  then  didn't  he  stay  there  ?  Because 
he  "  couldn't  get  the  shilling,"  and  he  can  compass  the  dollar. 

It  is  not,  then,  anybody's  interest  to  buy  in  the  cheapest  and 
sell  in  the  dearest  of  existing  markets,  if  by  that  operation  he 
leaves  himself,  in  the  long  run,  without  much  or  anything  to 
buy  with.  Least  of  all  is  it  the  interest  of  a  nation,  which  has 
the  power  to  create  for  itself  markets  in  which  the  relative 
cheapness  and  dearness  is  really  in  favor  of  all  classes  of  buyers 
and  sellers. 

§  248.  (3)  "  Every  country  has  its  own  natural  advantages, 
from  which  Providence  meant  the  rest  to  derive  benefit. 
Each  country  should  do  the  things  that  are  easiest.  Free  trade 
proposes  that  they  shall  do  so — Protection  that  they  shall  not. 
It  is,  therefore,  a  setting  aside  the  course  of  nature;  it  is  intro- 
ducing an  unnatural  system  of  exclusion." 

Every  country  has  its  own  natural  advantages,  from  which 
Providence  evidently  meant  its  own  people  to  derive  benefit. 
To  that  end  Providence  itself  gives  a  certain  measure  of  natu- 
ral protection  in  the  cost  of  transportation,  &c.  Were  all  the 
international  relations  of  the  people  in  a  natural  state,  that  natu- 
ral protection  would  possibly  be  quite  sufficient.    But  the  purely 


NATURAL   ADVANTAGES.  259 

artificial  status  cf  those  relations,  produced  by  an  unnatural 
national  economy  of  some  of  them,  deprives  others,  the  newer 
and  weaker  countries,  of  the  opportunities  of  luitural  growth 
and  development.  It  is  the  aim  of  protection  merely  to  remove 
the  obstacles  to  natural  growth. 

This  natural  growth  is  achieved  in  the  equilibrium  of  the 
industries.  If  one  wealthy  nation  has  destroyed  that  at  home, 
has  impoverished  her  agriculture  by  driving  out  of  that  channel 
the  mass  of  the  population,  and  is  thereby  forced  to  find  work 
for  them  in  manufacturing  goods  for  foreign  countries,  and  food 
for  them  in  the  unequal  exchange  of  those  goods  for  wheat  and 
corn,  all  her  financial  power  is  at  once  exerted  in  the  direction 
of  destroying  or  hindering  the  growth  of  the  equilibrium  of  the 
industries  elsewhere.  That  she  may  manufacture  for  the  rest 
of  the  world,  the  rest  of  the  world  must  confine  itself  to  raising 
food  and  raw  materials  for  her. 

Is  it  "  natural "  that  any  nation  should  keep  its  farms  on  one 
continent  and  its  workshops  on  another?  Is  it  *'  natural"  that 
cotton,  on  its  way  from  the  grower  to  the  wearer,  should  go 
half-way  round  the  globe  and  back  again  ?  Is  it  "  natural " 
that  a  large  part  of  the  race  should  be  employed  in  carrying 
bulky  articles — raw  materials  and  coarse  goods — from  some 
countries  to  others  in  the  same  climate  and  of  the  same 
general  capacity?  Is  it  "natural"  that  a  country  with 
millions  of  tons  of  iron  on  the  surface  of  her  soil,  and 
square  miles  of  good  coal  not  far  below  it,  and  most  of  her  labor 
running  to  waste  for  lack  of  employment,  should  send  for  rail- 
road iron  thousands  upon  thousands  of  miles  ?  (See  §  282.)  Is 
it  not  a  most  unnatural  and  artificial  system  ?  Or  is  there  no 
test  of  what  is  "  natural "  in  this  connection,  except  present 
cheapness  in  money  price  ? 

Protection  is  natural  resistance  to  an  unnatural  state  of 
things.  If  to  the  sujicrficial  eye  it  wear  the  appearance  of 
artificiality,  it  shares  in  the  reproach  of  many  a  just  war,  which, 
although  defensive  in  reality,  wore  the  appearance  of  being 
offensive. 


260  ELEMENTS    OE    POLITICAL   ECONOMY. 

§  249.  (4)  "  Protection  can  change  the  direction  of  capital, 
but  does  not  add  to  its  amount  or  efficiency.  It  can  only  divert 
it  from  more  to  less  remunerative  channels,  without  in  the  least 
adding  to  its  power  to  employ  and  fertilize  labor,  or  increase 
the  national  wealth." 

This  argument  has  been  partly  refuted  in  the  exhibition  of 
the  effects  of  a  varied  industry  upon  labor.  Its  chief  author, 
Adam  Smith,  gives  us  its  refutation  in  another  direction,  when 
he  calls  attention  to  the  greater  rapidity  of  movement  of  a  capi- 
tal employed  in  a  home  manufacture  than  a  foreign  trade,  a  con- 
sideration that  has  great  weight  when  a  country  of  limited  capi- 
tal is  under  discussion.  We  have  also  seen  that  the  capital  that 
is  wastefully  and  feebly  employed  in  a  native  manufacture  under 
free  trade,  becomes  far  more  efficient  when  a  protective  duty 
gives  it  a  larger  market.  Far  less  than  double  capital  will  do 
quadruple  the  work,  when  the  demand  is  quadrupled. 

But  the  chief  answer  is  that  capital  grows  steadily  under  a 
nationalist  policy,  and  declines  as  steadily  in  its  absence.  For 
capital  grows  as  the  power  of  association  is  increased,  and  the 
social  circulation  is  accelerated ;  declines  with  the  decline  of 
either.  Men  can  save  only  when  they  have  plenty  of  work,  and 
that  work  is  remunerative.  A  nation  that  leaves  its  labor  largely 
unemployed  is  unable  to  make  those  accumulations  of  the  results 
of  past  labor  that  we  call  capital.  A  nation  that  secures  its  peo- 
ple as  much  and  as  varied  industry  of  a  productive  and  re- 
munerative kind  as  the  case  permits,  is  on  the  road  to  wealth. 
In  the  latter  case  the  results  of  labor  are  more  evenly  distributed 
than  in  the  former;  they  are  represented  by  the  houses  owned 
by  well-paid  workmen ;  the  accounts  kept  at  the  saving's 
banks;  the  possession  of  better  furniture;  the  better  education 
of  the  children.  In  the  former  the  gains  effected  gather  into 
the  possession  of  a  few  men  of  great  fortune;  they  make  a 
greater  display,  but  the  mass  of  the  population  are  in  penury. 

Even  if  this  objection  were  true  in  the  sense  in  which  it  is 
meant,  the  advantage  of  protection  would  be  great.  To  direct 
a  part  of  the  capital  out  of  the  channels  in  which  alone  it  would 


"protection  does  not  protect.**  261 

earn  a  return  under  free  trade, — the  channels  of  money-lend- 
ing, land  speculation,  transportation  and  agriculture — would 
prove  a  great  gain  to  all  classes,  by  increasing  the  rapidity  of 
commerce  at  home,  by  diversifying  industry,  and  adding  to  the 
mutual  helpfulness  and  interdependence  of  the  people.  For  a 
new  country,  in  the  present  state  of  the  world's  industry,  the 
question  is  not  between  this  manufacture  and  that;  not  between 
*'  manufactures  suited  to  the  character  of  the  country,  and  there- 
fore remunerative,"  and  others  that  "  must  be  carried  on  at  a 
loss."  It  is  substantially  between  agriculture  associated  only 
with  a  few  of  the  rudest  industries  that  supply  its  direct  wants, 
and  the  equilibrium  of  the  industries,  in  which  manufactures 
hold  their  due  place.  Under  all  these  smooth  sayings  lies  this 
harsh  alternative,  which  is  carefully  hid  away  from  the  popular 
sight  by  round  words. 

§  250.  (5)  '*  Protection  does  not  protect."  This  paradox 
bears  two  senses :  1.  "  Production  does  not  increase  prices,  and, 
therefore,  does  not  stimulate  home  production.  Look,"  we 
are  told,  "  at  its  effect  on  copper.  A  heavy  duty  was  imposed, 
and  the  effect  was  that  the  article  reached  figures  so  low  that 
several  mines  had  to  stop,  and  its  price  at  home  is  more  governed 
by  the  prices  that  it  brings  in  the  foreign  market  than  ever 
before."  This  is  quite  true,  and  yet  the  aim  of  the  protective 
duty  was  accomplished.  The  American  producer  was  secured 
control  of  the  home  market;  if  he  went  into  over-production  he 
made  a  mistake  from  which  no  national  policy  or  legislation  could 
save  him.  That  he  began  to  export  pig  copper,  and  thus  to 
make  himself  dependent  upon  the  foreign  market,  is  not  the 
fault  of  the  tarifif.  He  merely  repeated  what  has  been  pointed 
out  as  the  great  mistake  made  by  the  farming  interest.  Mean- 
time, what  becomes  of  the  theory  that  protective  duties  add 
just  their  amount  to  the  price  at  home  ? 

2.  It  is  also  said  to  mean  :  "  Protection  makes  production  so 
expensive  that  the  home  manufacturer  is  shut  out  from  com- 
peting in  the  foreign  market.  The  amount  of  our  exports 
declines,  and  the  national  wealth  is  diminished." 


262  ELEMENTS    OF   POLITICAL   ECONOMY. 

In  1860  the  value  of  our  export  of  manufactures  was 
$42,100,000.  In  1881  it  was  $77,300,000,  or  including  all 
manufactured  foods,  $165,874,000.  But  even  if  it  were  much 
less  than  this  proportion,  we  should  have  every  reason  to  be 
satisfied.  The  chief  problem  for  the  country  is  to  secure  such 
an  equilibrium  of  our  industries  as  shall  employ  as  many  of 
our  people  as  possible  in  serving  each  other,  and  thus  dimin- 
ish our  dependence  upon  foreign  products.  The  growth  of 
domestic  commerce  under  the  protective  policy  far  more  than 
compensates  for  any  loss  it  might  have  inflicted  as  regards 
commerce  with  foreign  countries.  And  a  manufacturing  sys- 
tem which  has  the  patronage  of  fifty  millions  of  people  can 
afford  to  dispense  with  a  good  deal  of  foreign  custom. 

It  is  quite  true  that  America  will  obtain  a  very  large  share  of 
the  world's  commerce  in  the  not  distant  future.  Her  share  in  it 
now  would  have  been  much  greater  than  it  is  if  she  had  adopted 
the  policy  of  subsidizing  steamship  lines,  by  which  the  English 
producer  has  been  brought  near  to  every  foreign  market,  and  has 
been  enabled  to  send  his  goods  abroad  at  less  than  the  real  cost 
of  transportation.  The  quality  of  our  exports  of  manufactures 
is  what  has  made  for  them  the  foreign  demand  which  does  exist. 
We  make  more  honest  cottons,  more  ingenious  and  serviceable 
tools,  and  better  adjusted  machinery  than  our  rivals.  Had  we 
followed  the  free-trade  principle,  which  exalts  mere  cheapness 
above  everything  else,  we  should  not  have  effected  these  gains. 

But  it  must  be  borne  in  mind  that  the  amount  of  its  exports 
is  no  safe  criterion  of  the  general  prosperity  of  a  country.  Thafc 
notion  originated  in  countries  that  have  made  themselves  de- 
pendent upon  the  vicissitudes  of  foreign  trade.  If  we  export 
less  because  we  have  the  power  to  consume  more  at  home  so 
much  the  better.  This  must  certainly  be  true  of  the  United 
States  under  the  present  tariff.  The  manufactures  of  the 
country  have  vastly  increased,  and  if  we  send  less  of  their  pro- 
ducts abroad,  it  must  be  because  we  have  grown  wealthier  as  a 
nation  and  individually — able  to  command  the  use  of  more 
commodities. 


TUE   POWEll   OF   IMAGINATION.  263 

§  251.  (6)  "  Protection  discriminates  against  the  po(/rer  and 
more  thinly  settled  districts  of  the  nation  in  favor  of  the  older 
and  the  richer  states."  We  have  partly  answered  this  in  show- 
ing that  it  did  not  discriminate  against  the  farmer. 

The  tariff  is  no  more  designed  for  the  East  than  for  the  West. 
Even  if  it  had  only  the  effect  of  bringing  the  Western  farmer's 
market  to  buy  and  sell  from  across  the  Atlantic  to  our  own  sea- 
board, the  West  would  have  saved  that  much — the  tax  of  trans- 
portation across  the  sea,  the  uncertainty  of  foreign  demand,  &c. 
The  only  industry  that  the  West  could  cultivate  without  the 
tariff  is  the  raising  large  quantities  of  wheat,  to  be  sold  in  Lon- 
don or  Liverpool  at  $1.40  per  bushel  put  down,  after  paying 
railroads,  grain-dealers,  shipowners,  and  the  like. 

But  the  oflScial  figures  show  that  the  West  is  benefiting  by  the 
tariff  even  more  than  the  East.  While  the  increase  in  the  entire 
value  of  our  manufactures  between  1860  and  1870  was  128  per 
cent ,  in  the  seven  principal  Western  States  it  was  over  400  per 
cent.,  and  the  increase  in  all  the  Southern  States  also  outran  the 
national  average,  in  spite  of  the  vast  destruction  of  property  and 
the  prolonged  suspension  of  industry  there  during  the  war. 

These  facts  are  sufficient  for  our  purpose  here,  but  to  the  ad- 
vocates of  the  Nationalist  policy  they  are  not  satisfactory.  The 
South  and  West  might  have  done  far  better  than  this ;  would 
have  done  so  were  it  not  for  the  wide  dissemination  of  the  notion 
that  the  tariff  is  a  law  for  the  benefit  of  Eastern  and  Northern 
manufacturers.  Even  in  regard  to  material  interests  imagina- 
tion governs  men  greatly.  The  West  and  South  are  both  awaken- 
ing to  this  fact.  Georgia  is  ambitious  of  becoming  the  centre 
of  the  cotton  manufacture,  and  Chicago  and  Minneapolis  are 
destined  to  become  two  of  the  greatest  manufacturing  centres 
of  the  world. 

My  old  classmate,  the  postmaster  of  Charlotte,  N.  C,  tells  mc  that  he 
found  the  people  of  his  neighborhood  so  completely  possessed  with  this 
prejudice,  that  he  could  hardly  induce  them  to  begin  manufacturing  their 
own  cotton  instead  of  exporting  it.  By  taking  advantage  of  every  occa- 
sion, public  or  private,  he  at  last  persuaded  them  to  organize  companies 


264  ELEMENTS    OF   POLITICAL   ECONOMY. 

to  start  spinning-mills  and  weaving-factories,  so  as  to  find  a  local  invest- 
ment for  their  little  savings.  The  result  has  been  that  employment  has 
been  found  for  large  numbers  who  would  otherwise  have  remained  idle ; 
the  water-power  that  was  running  to  waste  has  been  utilized ;  profits 
larger  than  those  of  the  Northern  manufacturer  have  been  realized;  the 
price  of  cottons  in  the  neighborhood  has  been  reduced,  and  the  general 
well-being  of  society  generally  promoted. 

§  252.  (7)  "  The  doctrine  of  protection  leads  on  logically  to 
the  platform  of  the  Communists.  It  teaches  the  people  that  it 
is  the  business  of  the  state  to  provide  for  the  prosperity  and  em- 
ployment of  the  people.  The  next  step  is  to  assert  that  the 
people  have  a  right  to  employment,  and  that  if  the  competition 
of  individual  capitalists  fail  to  furnish  them  with  that,  the  state 
must  step  in  to  establish  national  workshops  for  the  benefit  of 
those  who  are  out  of  work.  From  this,  to  the  monopoly  of  all 
industry,  and  consequently  of  all  property  by  the  state,  is  an 
easy  descent.^' 

The  Nation  (April 9th,  1874)  speaks  of  "European  socialism,  the  seeds 
of  which  were  naturally  found  in  Continental  centralization,  and  were 
brought  to  this  country  in  the  protective  system." 

Protection  cordially  accepts  the  existing  order  of  society,  the 
present  distribution  of  wealth  and  the  lawful  freedom  of  indi- 
vidual action,  as  right  and  proper.  Its  chief  advocates  (Thiers, 
&c.)  have  been  zealous  opponents  of  Communistic  socialism,  and 
the  ablest  defenders  of  the  rights  of  property.  While  it  asserts 
that  the  industrial  growth  and  welfare  of  the  people  must  be 
among  the  first  cares  of  the  statesman,  it  does  not  teach — what 
all  experience  refutes,  that  this  can  be  attained  through  the 
direct  action  of  the  state  as  the  employer  and  organizer  of  labor 
in  general,  while  it  with  consistency  accords  the  state  a  monopoly 
of  a  few  departments,  such  as  the  post-office. 

That  the  protectionist  principle  bears  some  resemblance  to  the 
false  positions  of  the  Communists,  or  can  be  made  to  do  so  in 
clever  but  hostile  statements,  we  do  not  care  to  deny.  It  con- 
tains the  truth  of  which  communism  is  the  counterfeit  false- 
hood,— the  truth  that  it  is  the  duty  of  the  state  to  "  promote 
the  general  welfare."     It  thus  furnishes  the  best  refutation  of 


PROTECTION  AND  COMMUNISM.  265 

conirauQism,  for  error  is  never  defeated  and  put  to  rest  by  bare  con- 
tradictions, but  by  the  statement  of  the  truth  that  lies  nearest  to 
them,  or  even  involved  in  them,  and  that  gives  them  what  vitality 
they  have.  If  the  assertion  of  that  duty  leads  on  to  com- 
munism there  is  unhappily  no  escape  for  the  American  nation  ; 
the  country  stands  already  committed  to  it  by  the  preamble  to 
the  United  States  Constitution.  That  that  preamble  pointed  to 
a  protectionist  policy  is  clear  from  the  expressions  of  popular 
feeling  while  the  Constitution  was  under  discussion,  and  from 
the  legislation  adopted  by  the  first  Congress  under  the  new 
government. 

Throughout  the  earlier  chapters  we  have  seen  two  great  con- 
trasted theories  of  the  nature  and  effects  of  social  progress  under 
the  existing  constitution  of  society.  The  one  declares  that  the 
world  under  the  freedom  of  individual  action  is  drifting  steadily 
toward  distress  and  misery  j  that  whatever  progress  is  achieved 
enures  only  to  the  benefit  of  the  few,  and  rather  detracts  from 
than  adds  to  the  well-being  of  the  many;  that  it  is  in  the 
interests  of  the  rich  to  keep  the  wages  of  the  poor  as  low  as  pos- 
sible so  long  as  free  competition  is  the  law  and  rule  of  industry. 
Whoever  holds  with  this  teaching  must  vibrate  between 
the  theory  of  state  passivity  or  free  trade,  and  that  of  the  reno- 
vation of  society  by  the  destruction  of  the  existing  rights  of 
property  and  methods  of  distribution.  He  will  incline  to  the 
former  whenever  he  is  least  hopeful  of  the  future  of  society,  or 
least  alive  to  its  miseries.  He  will  favor  the  other  whenever  he 
is  awake  to  those  miseries,  but  confident  that  they  are  not  the~ 
necessary  lot  of  mankind. 

The  other  body  of  teaching  declares  that  power  and  freedom 
go  hand  in  hand  in  the  world's  progress ;  that  except  by  arti- 
ficial interference  every  gain  for  man  in  power  over  nature  is  a 
gain  for  all ;  that  wealth  naturally  tends  to  an  equable  distribu- 
tion among  all  classes ;  that  the  interest  of  the  capitalist  is  to 
pay  well  those  whom  he  employs  so  as  to  tievelop  their  power  to 
the  uttermost;  that  labor  continually  and  naturally  grows  in 
power  over  all   the   accumulations  of  past   labor  that  we   call 


266  ELEMENTS   OF   POLITICAL    ECONOMY. 

capital.  If  the  latter  teaching  be  likely  to  lead  some  of  the 
thoughtless  into  communism  or  socialism,  is  it  not  far  more  likely 
that  the  former  will  lead  thither  those  of  the  thoughtful  who  are 
not  able  to  think  their  way  out  of  these  doctrines  ? 

And  we  are  not  left  to  conjecture  here.  Mr.  Mill  is  certainly, 
after  Adam  Smith,  the  most  distinguished  writer  of  the  Free 
Trade  School ;  in  his  Autobiography  he  discloses  the  fact  that 
his  hearty  acceptance  of  the  doctrines  of  Malthus,  Ricardo  and 
his  own  father,  had  led  him  to  such  gloomy  conclusions  as  to  the 
results  of  the  existing  organization  of  society  and  its  distribution 
of  property,  that  he  had  come  to  the  conclusion  that  it  would 
be  a  change  for  the  better  were  some  modification  of  socialism 
to  be  substituted  so  as  to  put  a  limit  to  the  great  and  growing 
inequality  of  wealth  and  extension  of  poverty  that  he  saw  around 
him.  He  also  tells  us,  what  is  the  fact,  that  Bastiat  adopted  in 
part  the  views  of  the  Nationalist  school  in  order  the  better  to 
fight  the  Communists  who  attack  landed  propert)\  What 
Schultze-Delitzsch  and  his  opponent  Lassalle  have  to  say  on 
this  question  has  already  been  told  (§  114). 


CHAPTER  TWELFTH. 
The  Science  and  Economy  of  Manufactures. — The 
<  Practice. 

§  253.  The  theory  and  the  practice  of  national  economy,  as 
aheady  remarked,  (§  G),  do  not  always  go  hand  in  hand.  The 
theory  in  some  cases  is  much  better  than  the  practice ;  men  see 
and  approve  the  better  course  and  follow  the  worse.  In  other 
cases  it  is  worse  than  the  practice,  or  lugs  behind  it.  In  all  the 
more  necessary  and  practical  affairs  of  life,  men  are  not  left  de- 
pendent upon  the  possession  of  correct  theories.  They  do  in- 
stinctively the  right  thing,  having  no  conscious  reason,  or  only 
a  bad  one;  and  after  their  practice  has  been  repeatedly  sub- 
jected to  the  censures  or  the  mockery  of  shallow  theorists,  it  is 
at  last  vindicated  by  the  riper  judgment  and  clearer  insight  of 
wiser  men. 

It  is,  therefore,  a  mistake  to  suppose  that  the  practice  of  na- 
tional economy  at  a  time  when  correct  or  current  theories  of  the 
subject  had  not  yet  begun  to  be  formed,  is  unworthy  of  our  study. 
Men  "  builded  wiser  than  they  knew  "  in  many  things;  the  great 
and  wholesome  instincts  that  grew  out  of  the  national  life  into 
which  they  were  born,  and  from  which  their  own  life  derived 
half  its  value,  led  them  aright  where  they  had  no  theory;  and 
only  shallow  doctrinaires  would  depreciate  the  results  as  having 
no  right  to  exist,  because  not  attained  logically. 

§  254.  The  ancient  writers  op  political  philosophy  confined 
their  attention  chiefly  to  the  jural  state.  But  the  actual  rulers 
had  a  clear  notion  of  economic  policy.  Boeckh  has  shown  (as 
against  Heeren)  that  Athens  took  measures  to  protect  home  in- 
dustry, to  develop  its  various  forms,  and  to  make  the  state  inde- 
pendent of  its  rivals  for  the  necessaries  of  life.  The  low  concep- 
tions of  political  morality  that  prevailed,  allowed  of  the  use  of 
means  to  this  end  which  are  not  capable  of  vindication.  If  an  ally 
of  Athens  had  corn  to  sell,  it  must  be  brought  to  the  port  of 

267 


268  ELEMENTS   OF   POLITICAL   ECONOMY. 

Athens  (the  Piraeos),  and  a  certain  proportion  must  be  sold  for 
use  in  the  city  itself,  and  at  a  fixed  price,  before  any  could  be 
disposed  of  at  competition  prices  to  the  merchants  of  other 
cities.  The  effect  of  these  measures  was  limited  by  the  nature 
of  the  political  constitution  of  Greece.  In  this  as  in  other  mat- 
ters every  city  legislated  for  itself;  nothing  was  done  to  benefit 
Greece  as  a  whole,  and  to  bring  her  different  divisions  into  the 
close  and  friendly  relations  of  mutual  helpfulness.  Even  the 
structure  of  the  country  forbade  this ;  it  was  easier  and  cheaper 
to  feed  Athens  with  corn  from  the  Chersonesus  than  to  carry 
food  over  the  mountain  passes  from  Boeotia.  That  the  country 
never  became  an  industrial  whole,  is  connected  with  the  fact  that 
it  was  never  a  political  unit.  It  fell  into  subjection  through  the 
weakness  of  its  social  constitution. 

Rome  also  adopted  a  Protectionist  or  Nationalist  policy  in 
earlier  times,  when  she  was  still  a  people  among  the  peoples. 
Already  she  was  a  great  industrial  city,  competing  with  Carthage 
for  the  commercial  preeminence  of  the  Mediterranean.  When 
she  became  an  empire,  the  enemy  and  the  destroyer  of  nationali- 
ties, she  of  course  abandoned  that  policy. 

§  255.  In  the  middle  ages  industry  was  in  the  hands  of 
chartered  guilds,  and  was  a  matter  of  privilege  and  prescrip- 
tion. The  states  that  awoke  to  the  importance  of  the  industrial 
life  of  the  community  all  took  measures  to  protect  and  cherish 
local  industries.  In  Italy  the  great  prosperity  of  Venice  was 
largely  owing  to  the  care  with  which  she  protected  all  the  inte- 
rests of  her  merchant  princes,  and  the  rival  cities  of  the  main- 
land followed  hard  in  her  footsteps. 

Charles  V.,  of  Spain  and  Germany,  studied  the  maxims  and 
methods  of  Venetian  policy,  and  adopted  them  in  Spain.  But 
when  the  industries  of  his  kingdom  sprang  into  life,  he  loaded 
them  down  with  oppressive  and  vexatious  burdens,  in  order  to 
raise  money  for  his  wars.  The  alcavala  imposed  a  tax  upon 
every  transaction,  the  intercourse  between  the  provinces  was 
put  under  a  heavy  tariff  of  duties,  and  the  right  to  collect  these 
was  farmed  to  individuals  who  were  often  foreigners.     Every 


HENRY   IV.    AND   COLBERT.  2G9 

wise  maxim  was  set  at  nought,  and  the  country  languished  in 
ever-deepening  poverty. 

§  256.  In  France,  the  leading  statesmen  had  learnt  the 
same  lesson  from  the  Italian  cities,  but  to  better  purpose.  Sully, 
indeed  (anticipating  the  Economlstes  of  the  last  century),  wished  to 
promote  agriculture  alone,  and  regarded  manufactures  as  promo- 
ting luxury  and  waste.  But  France  owes  to  the  care  and 
patronage  of  his  wiser  master,  Henry  IV.,  the  transfer  of  the 
growth  and  manufacture  of  silk  from  Italy  to  her  own  soil. 

Colbert,  the  greatest  statesman  of  the  reign  of  Louis  XIV., 
was  recommended  to  the  confidence  of  that  monarch  by  the 
Cardinal  Mazarin  as  his  last  act.  The  King  "  might  with  truth 
and  justice  say  that,  in  giving  him  Colbert,  God  had  done  much 
for  the  prosperity  and  glory  of  his  reign.  France  might  add 
that  she  owes  to  his  wise  counsels  the  wonderful  develop- 
ment of  her  industry"  (Thierry).  His  "spirit  has  appa- 
rently never  ceased  to  influence  the  councils  of  his  country" 
(Dr  Travers  Twiss,  in  1847).  He  found  the  finances  in  a  ruin- 
ous state,  and  that  the  industrial  interests  of  the  country  had 
been  sadly  neglected  during  the  period  of  confusion  that  had 
elapsed  since  the  death  of  Henry  IV.  As  Adam  Smith  says, 
he  combined  great  integrity  and  great  clearness  of  intellect, 
with  the  habits  of  a  laborious  man  of  business.  His  weakness 
was  undoubtedly  his  too  great  faith  in  the  virtues  of  legislative 
interference.  He  did  not  know  when  to  stop.  He  found  the 
frontiers  of  the  provinces  lined  with  custom-houses  for  the  col- 
lection of  unnatural  duties  upon  domestic  commerce,  and  these  he 
wisely  transferred  to  the  frontiers  of  the  nation.  He  developed 
the  French  marine  by  a  system  of  bounties.  He  removed 
exces.sive  burdens  from  the  shoulders  of  the  agricultural  class, 
and  then  did  them  more  than  equal  harm  by  prohibiting  the 
export  of  wheat.  In  1661:  he  had  enacted  his  great  tariff"  law, 
by  which  duties  were  taken  off  exports,  and  imposed  upon  man 
ufactured  goods  imported  from  other  countries.  That  the  effect 
was  "  the  prodigious  development  of  France  under  the  encour- 
agement which  it  afforded  them"  (Blanqui)  is  admitted  even  by 


270  ELEMENTS   OF   POLITICAL   ECONOMY. 

the  Free  Traders,  who  deplore  the  means  he  adopted.  Those 
light  and  graceful  fabrics,  in  whose  production  the  skill  and 
nice  taste  of  this  Celtic  people  find  exercise,  were  naturalized  in 
France  by  Colbert ;  without  him,  as  Irish  history  shows,  these 
national  gifts  might  have  lain  idle.  "  France,"  says  J.  B.  Say, 
*'  at  present  contains  the  most  beautiful  manufactures  of  silk 
and  wool  in  the  world,  and  is  probably  indebted  for  them  to  the 
wise  encouragement  of  Colbert's  administration."  Some  En- 
glish writers  urge,  indeed,  "that  France  showed  signs  of 
revived  prosperity  and  augmented  wealth  under  the  administra- 
tion of  Colbert,  was  to  be  attributed  to  the  re-establishment  of 
order  in  the  finances  of  the  country,  and  the  removal  of  various 
obstacles  which  impeded  the  operation  of  certain  branches  of 
industry"  (Twiss).  It  is  certain  that  France  was  a  richer 
and  more  prosperous  country  than  at  any  previous  period, 
partly  in  spite  of  the  meddlesome  trifling  of  the  regulations 
which  Colbert  imposed  upon  the  industries  he  had  called 
into  existence.  The  man  could  put  no  restraint  upon  his  won- 
derful gift  for  arranging  details ;  he  irritated  the  French  mer- 
chants till  they  told  him  that  what  they  chiefly  asked  of  him 
was  to  'Met  them  alone"  (^Laissez  faire)  ;  and  one  of  them  de- 
clared that  Colbert,  after  getting  the  coach  out  of  the  slough  on 
one  side,  had  tumbled  it  back  again  on  the  other. 

France  did  not  long  reap  the  benefits  that  Colbert's  system 
conferred.  Louis  XIV.  had  no  sense  of  the  importance  of  in- 
dustry. He  wrote  to  Charles  II. :  *'  If  the  English  are  satisfied 
to  be  the  merchants  of  the  world,  and  leave  me  to  conquer  it, 
the  matter  can  easily  be  arranged.  Of  the  commerce  of  the 
globe,  three  parts  to  England  and  one  part  to  France."  He, 
therefore,  wasted  the  national  wealth  in  unsuccessful  wars,  and 
generally  bought  peace  by  granting  treaties  which  pledged 
him  to  remove  duties  from  foreign  manufactures.  That  of 
Nimcguen,  in  1713,  completed  the  work  of  destroying  the  pro- 
tective system.  Colbert  died  of  a  broken  heart  in  1683,  amidst 
general  distress  ;  two  years  later  a  still  more  deadly  blow  was 
struck  at  French  industry  at  home  ;  the  edict  of  Nantes  (1598), 


THE   EXPULSION   OF   THE    HUGUENOTS.  271 

by  which  the  Huguenots  received  full  toleration,  was  revoked 
(1G85),  and  half  a  million  of  the  most  industrious  and  intelli- 
gent class  of  French  manufacturers  and  tradesmen  were  driven 
into  England,  Holland  and  Germany.  "They  carried  with  them 
the  skill  and  intelligence,  and  the  secrets  of  trade  that  made 
France  great,  and  many  of  the  most  important  industries  of 
England,  especially,  are  traced  back  to  those  expatriated 
Frenchmen."  *'  They  are  at  this  time  improving  the  manufac- 
tures of  your  majesty's  enemies,'*  pleaded  Colbert  against  the 
measures  of  intolerance  undertaken  even  during  his  lifetime; 
he  himself  aflforded  them  all  the  protection  in  his  power.  No 
greater  service  could  be  rendered  to  the  Protestant  cause  outside 
France  than  was  rendered  by  the  intolerance  of  Louis  XIV. ; 
it  laid  the  foundation  of  the  industrial,  and,  consequently,  of 
the  political  predominance  of  the  Reformed  nations,  by  supply- 
ing just  the  element  that  their  manufacturing  methods  most 
lacked.  The  reign  that  opened  with  such  bright  promise  in 
1661,  closes  in  1715  with  a  universal  depression  of  every  mate- 
rial interest  of  France. 

The  history  of  the  financial  policy  of  France  between  this 
period  and  the  accession  of  Turgot,  in  1783,  is  a  story  of  make- 
shift and  extravagance,  in  which  the  Law  episode  is  merely 
the  most  fantastic  passage.  Turgot  was  theoretically  a  free 
trader  of  the  school  of,  the  Economistes ',  but  he  seems  to 
have  shrunk  instinctively  from  any  steps  to  realize  these  views, 
while  he  took  the  boldest  measures  to  destroy  monopolies  and  to 
release  labor  from  traditional  shackles  of  all  sorts.  His  success- 
ors in  1786  negotiated  a  treaty  with  England,  by  which  Franco 
was  flooded  with  English  goods,  and  in  two  years  the  manu- 
facturing industries  of  France  were  almost  annihilated.  Distress 
became  so  universal  that  the  government  was  forced  to  call  the 
States-General,  and  the  Revolution — whose  first  and  loudest  cry 
was  "  Give  us  bread  !" — began. 

§  257.  Napoleon  restored  the  policy  of  Colbert.  He  united 
all  Central  Europe  into  one  vast  empire,  with  perfect  freedom 
of  trade  between  all  its  divisions,  and  in  so  far  allowed  the  devel 


272  ELEMENTS   OF   POLITICAL   ECONOMY. 

oped  industry  of  one  part  to  cramp  the  development  of  that  of  an- 
other,' knowing  that  France  chiefly  profited  by  this.  But  he 
shut  out  from  the  Continent  the  manufactures  of  the  power  that 
had  long  kept  all  the  rest  in  industrial  subordination,  and  every- 
where throughout  Europe  manufactures  began  to  spring  up 
again.  He  had  as  little  liking  for  English  doctrines  as  for  Eng- 
lish goods.  In  1803  he  forbade  J.  B.  Say  to  publish  in  France 
the  work  in  which  he  had  systematized  the  views  and  theories  of 
Adam  Smith.  He  said  :  "  If  an  empire  were  made  of  adamant, 
political  economy  would  grind  it  to  powder."  But  he  had 
thoughts  of  his  own  on  the  subject.  "  Formerly  there  was  only 
one  kind  of  property,  land ;  another  has  now  arisen,  industry.'* 
He  would  defend  the  one  as  well  as  the  other  from  invasion  by 
f'  the  nation  of  shopkeepers." 

England  had  control  of  the  seas,  and  Europe  drew  her  supply 
of  sugar  mainly  from  the  British  colonies.  Prussian  chemists 
had  been  making  experiments  on  the  extraction  of  sugar  from 
the  beet,  under  the  patronage  of  Frederick  the  Great,  who  was 
like  Napoleon  a  very  decided  protectionist.  At  the  Prussian 
king's  death,  the  experiments  ceased  for  lack  of  means  to  carry 
them  on.  They  were  again  resumed  under  Napoleon,  and  the 
French  Institute  appointed  a  commission  to  look  into  the  matter. 
The  first  attempts  were  failures,  and  France  went  on  for  years 
paying  fifty  cents  a  pound  for  foreign  sugar.  In  1810,  the 
matter  was  taken  up  again  under  imperial  patronage  ;  special 
schools  of  chemistry  were  founded,  and  a  large  area  of  land  was 
devoted  to  the  culture,  and  in  1812  nearly  5,000,000  pounds  of 
beet  sugar  was  in  the  market.  The  industry  survived  the 
Restoration,  for  the  Bourbons  did  not  bring  back  permanent 
free  trade.  "  For  thirty  years  nearly  every  law  passed  on  custom- 
house matters  has  been  intended  either  to  establish  or  to  con- 
solidate the  system  of  protection  and  prohibition"  (J.  B.  Say, 
1826).  Beet  sugar  now  holds  its  own  against  the  foreign  com- 
petitor, and  pays  a  tax  to  the  government.  It  occupies  an  ever- 
increasing  area  of  Flemish,  German,  Swedish,  Polish,  Russian 
and  French  soil, — millions  of  acres  of  the  last.     Its  production 


^itENCH   PERSISTENCY   IN   PROTECTION.  273 

has  mvigorited  other  industries,  especially  agriculture  j  the  refuse 
pulp  furni-b**-!  an  excellent  food  for  vast  numbers  of  cattle,  and 
their  manure,  with  the  other  refuse  of  the  factories,  has  added 
greatly  to  the  fertility  of  the  soil.  No  district  produces  less 
wheat,  for  having  begun  beet  culture ;  generally  more.  It  fur- 
nishes winter  work,  and  work  for  women  and  children,  giving 
employment  to  a  great  number  of  persons,  who  would  else  be 
idle.  The  Journal  des  Fabricants  de  Sucre  for  January  4th  1866, 
says :  "  One  of  the  most  remarkable  and  interesting  facts  of  the 
past  year  is  the  export  of  considerable  quantities  of  sugar  from 
France  to  England,  a  country  that,  not  many  years  ago,  tried  tc 
stifle  the  beet  sugar  industry  in  its  cradle." 

§  258.  Under  all  changes  of  government,  France  clung  to 
the  commercial  policy  of  Colbert  and  Napoleon,  down  to  our  own 
times.  That  she  advanced  most  rapidly  in  the  development  of 
every  material  interest,  is  as  clearly  proved  by  the  official  returns 
to  the  government  as  anything  well  can  be.  Between  1820  arid 
1857  the  growth  of  wheat  rose  from  5.4  to  6.8  bushels  per  head 
of  the  people,  so  that  she  feeds  all  her  people,  and  has  food  to 
spare,  though  her  population  is  nearly  three  times  as  dense  as 
that  of  Pennsylvania.  Between  1836  and  1856  the  value  of  her 
exports  increased  131  per  cent.,  though  the  population  had  not 
increased  five  per  cent.  The  increase  in  fhe  value  of  British 
exports  for  the  same  period  was  120  per  cent. ;  and  the  amount 
of  these  that  were  paid  for  in  imports  was  fully  one-half,  while 
that  of  France  was  not  more  than  a  fifth. 

In  1860  the  superior  j^rson  who  had  made  himself  Emperor 
of  the  French,  and  afterwards  unmade  himself,  set  aside  all 
the  traditions  of  French  finance  and  negotiated  a  commercial 
treaty  with  England,  providing  for  a  reduction  of  import  duties 
on  both  sides.  The  English  free  traders,  Cobden,  Gladstone, 
&c.,  who  were  engaged  in  the  negotiation,  set  at  nought  the  tra- 
ditional maxims  of  the  school.  "  We  want  trade,"  said  Mr. 
Ricardo,  "  not  treaties  of  commerce ;  for  they  are  opposed  to 
our  principles."  The  great  body  of  the  French  people,  espe- 
cially the  opponents  of  Napoleonic  personal  government,  opposed 
18 


274  ELEMENTS   OF   POLITICAL   ECONOMY. 

the  treaty  and  its  principles  most  strenuously;  but  English 
liberals  elaborated  it  in  secret  conferences  with  the  agents  of 
the  French  empire,  and  rejoiced  when  the  imperial  will  forced 
it  upon  "  the  most  Protectionist  of  European  lands,"  as  one  of 
Cobden's  eulogists  says.  On  the  one  hand  England  removed  all 
duties  on  French  manufactures  and  lowered  the  excise  duties 
upon  French  wines  and  spirits;  on  the  other  hand  French  du- 
ties on  English  manufactures,  if  more  than  thirty  per  cent,  ad 
valorem,  were  to  be  reduced  to  that  amount  at  October  1st,  1861, 
and  to  twenty-five  per  cent,  three  years  later.  The  eifect  was 
no  doubt  to  increase  very  greatly  the  trade  between  the  two 
countries;  they  bought  of  each  other  many  things  that  they 
had  been  accustomed  to  make  at  home,  and  employed  a  larger 
number  of  people  in  carrying  these  articles  back  and  forward, 
instead  of  setting  them  at  productive  work.  Some  industries  in 
each  country  gained  at  the  expense  of  corresponding  interests 
in  the  other ;  they  had  been  doing  well,  and  they  did  better. 
Other  industries  in  each  were  very  greatly  injured  by  the  change, 
and  numbers  of  people  thrown  out  of  employment.  This  gain 
was  thought  a  sufiicient  off-set  among  the  friends  of  the  treaty. 
France  employed  a  far  larger  number  of  her  people  in  serving 
foreigners,  and  made  them  dependent  upon  the  vicissitudes  of 
the  foreign  market.  Hitherto  she  had  suffered  little  or  nothing 
from  commercial  revulsions  and  panics ;  from  this  time  they  be- 
gan to  affect  her  money-market  and  her  industries.  She  lost  in 
the  stability  of  employments,  wages  and  profits.  But  she  lost 
much  less  than  if  she  had  made  the  experiment  thirty  or  fifty 
years  earlier;  the  gains  of  her  long  era  of  consistent  and  per- 
sistent Protection,  made  her  able  to  sustain  the  hazard  of  the 
new  era.  She  had  become  a  rich  country,  with  abundance  of 
cheap  capital,  industrial  skill,  popular  intelligence  and  enter- 
prise. She  could  afford  some  competition,  and  even  the  imperial 
charlatan  did  not  design  to  try  unrestricted  competition.  The 
duties  preserved, — if  we  consider  the  stage  of  skill,  industry  and 
capital  that  France  had  reached — were  really  as  fully  protective 
as  many  that  have  been  enacted  in  our  own  country  with  a  view 


ENGLAND'S   INDUSTRIAL   BEGINNINGS.  275 

to  protection.  One  of  the  emperor's  organs,  the  Journal  fJe9 
DthatSy  boasted  that  he  had  outwitted  the  Ei.glish  statesmen, 
and  that  the  thirty  per  cent,  duties  would  be  really  protective. 

Our  staunch  friend,  (?ount  Agonor  de  (Jaspiirin,  in  his  Un  O'rttnd  I'i'uple 
qui  se  liclevc,  asserts  tiiat  the  French  Treaty  is  actually  more  ])rohibitory 
than  the  Morrill  Tariff  of  1861.  Yet  French  manufacturers  complained 
of  its  terms.  Although  the  duty  on  iron  was  $12  a  ton,  it  was  said  that 
the  production  of  iron  in  Franco  was  impossible.  In  18(58  the  Chamber 
of  Arts  of  Roubaix,  the  leading  centre  of  the  wool-combing  industry,  and 
the  neighboring  city  of  Tourcoing,  protested  against  the  renewal  of  the 
treaty,  and  the  workingmen  petitioned  to  the  same  effect.  The  manu- 
facturers of  Lille  and  Amiens  united  in  the  protest,  and  the  Moniteur  In- 
dustriel  complained  that  the  treaty  "  has  carried  20,000,000,000  francs  to 
the  debtor  side  of  our  national  credit  sheet." 

Since  the  French  people  obtained  the  control  of  their  own  af- 
fairs by  the  overthrow  of  the  Second  Empire,  they  have  revised 
their  general  tariflf  in  a  protectionist  sense.  For  the  treaty  of 
commerce  of  1860  they  have  refused,  after  negotiations  prolonged 
over  years,  to  substitute  any  other,  unless  it  were  one  much  less 
favorable  to  free  intercourse  with  England.  The  duties  on  cot- 
tons and  woolens  were  the  matters  of  most  difficulty. 

§  259.  England  owes  her  industrial  greatness  to  the  persist- 
ency with  which  she  adhered  to  the  Nationalist  policy.  Five 
centuries  ago  she  was  little  more  than  an  agricultural  country. 
She  produced  an  abundance  of  excellent  wool,  but  her  workshops 
were  on  the  Continent,  among  the  Flemings,  whither  English 
wool  was  carried  to  be  converted  into  cloth.  "  The  ribs  of  all 
people  throughout  the  world  are  kept  warm  by  the  fleeces  of 
English  wool/'  (Matthew  Paris).  "  Most  articles  of  clothing, 
excepting  such  as  were  produced  by  ordinary  domestic  industry, 
were  imported  from  Flanders,  France  and  Germany.  The  names 
of  the  articles  to  this  day  indicate  the  places  where  they  were 
manufactured.  Thus  there  was  the  mechlin  lace  of  Mechlin, 
the  duffle  of  Duffel,  the  diaper  of  Ypres  (d'Ypre),  the  cambric 
of  Cambrai,  the  arras  of  Arras,  the  tulle  of  Tulle,  the  damask 
of  Damascus,  and  the  dimity  of  Damietta.  Besides  these  we 
imported  delf  ware  from  Delph,  Venetian  glass  from  Venice,  cord- 
ovan leather  from  Cordova,  and  millinery  from  Milan  "  (Smiles). 


276  ELEMENTS   OF   POLITICAL    ECDNOMY. 

The  last  term  formerly  included  all  sorts  of  fancy  and  ladies' 
wares.  Edward  III.,  ''  the  greatest  of  the  Plantagenets,"  a  sov- 
ereign of  the  same  class  with  Frederick  and  Napoleon,  took  the 
first  step  to  bring  the  nation  out  of  this  industrial  dependence. 
Some  Flemish  workmen  had  fled  into  England,  and  this  seems 
to  have  suggested  to  him  the  idea  of  importing  Flemish  skill 
lather  than  its  products,  of  bringing  the  farmer  and  artisan  into 
neighborhood.  An  act  of  Parliament  was  passed  in  1337,  for- 
bidding under  heavy  penalties  the  exportation  of  wool  and  the 
importation  of  woollen  goods.  This  heroic  remedy  probably 
caused  some  embarrassment,  for  the  English  did  not  possess 
the  skill  to  produce  the  equal  of  Flemish  fabrics;  but  the  Flemings 
were  in  worse  straits.  "  Then  might  have  been  seen  throughout 
Flanders  weavers,  fullers,  and  others  living  by  the  woollen  manu- 
facture, either  begging  or  under  stress  of  debt  tilling  the  soil.'' 
A  large  number  listened  to  the  invitation  held  out  by  the 
English  government,  and  finding  themselves  cut  ofi"  from  the 
English  market  so  long  as  they  remained  at  home,  came  over 
into  England  and  brought  their  trade  with  them.  Old  manorial 
rolls  and  charters  from  this  time  on,  contain  great  numbers  of 
unmistakably  Flemish  names,  especially  those  that  relate  to  the 
Eastern  shires.  As  to  the  exportation  of  wool,  that  became  a 
monopoly  of  the  king's  exchequer,  and  added  much  to  the  rev- 
«3nue  at  a  time  when  the  kings  were  much  in  need  of  such  sup- 
plies. England  then  declined  to  compete  with  and  began  to 
emulate  Flanders ;  artisan  and  farmer  were  brought  into  prox- 
imity, and  the  price  of  manufactured  goods  approximated  to  that 
of  the  raw  materials. 

The  penalty  for  a  first  violation  of  this  law  was  a  fine;  for  a  second, 
maiming;  for  a  third,  imprisonment;  for  a  fourth,  death.  In  1746  the 
last  was  changed  to  seven  years'  transportation.  In  1334  all  were 
abolished. 

From  this  time  woollens  were  the  great  English  staple.  Other 
branches  lay  under  comparative  neglect.  Even  iron  was  im- 
ported from  the  Continent  for  the  use  of  English  blacksmiths, 
and  its  cost  was  an  important  item  in  the  expense  of  a  farm 


CONTINENTAL   REFUGEES   IN   ENGLAND.  277 

(§  77).  The  coming  in  of  Protestant  refugees  from  the,  Low 
Countries  and  France,  which  began  about  1550,  was  so  extensive 
that  an  investigation  showed  the  presence  of  40,000  that  year 
in  London  alone.  Queen  Elizabeth  planted  a  great  number  at 
the  then  decayed  town  of  Sandwich,  describing  them  as  "  men 
of  knowledge  in  sundry  handicrafts,"  such  as  "  the  making  of 
says,  baize  and  other  cloth,  which  hath  not  been  used  to  be  made 
in  this  our  realme  of  England."  Both  Norwich  and  Sandwich 
were  recovered  to  prosperity  by  these  foreigners.  They  intro- 
duced, besides  the  spinning  and  weaving  of  new  fabrics,  the  art 
of  dyeing,  of  which  the  Flemings  had  preserved  the  monopoly. 
"  The  native  population  gradually  learned  to  practise  the  same 
branches  of  manufacture;  new  sources  of  employment  were 
opened  up  to  them ;  and  in  the  course  of  a  few  years  Eng- 
land, instead  of  depending  upon  foreigners  for  its  supply  of  cloth, 
was  not  only  able  to  produce  sufl&cientfor  its  own  use,  but  to  ex- 
port the  article  in .  considerable  quantities  abroad"  (Smiles). 
They  brought  over  the  manufacture  of  lace  and  cutlery.  They 
also  put  an  end  to  the  importation  of  cabbages,  onions,  and 
other  vegetables  from  Holland,  by  establishing  kitchen  gardens, 
first  at  Sandwich  and  then  at  London.  In  1621  the  10,000 
strangers  in  London  were  plying  121  different  trades.  The  un- 
wise intolerance  of  Continental  governments  led  to  these  trans- 
fers of  skill  and  experience,  and  pointed  out  the  wisdom  of  the 
policy  that  brings  the  workshops  of  a  nation  home  to  its  own  soil, 
to  the  neighborhood  of  its  farms.  The  industrial  life  of  the  Eng- 
lish people  took  a  great  advance  j  from  the  uniformity  of  a  single 
occupation,  they  rose  to  that  varied  industry,  which  is  the  mark 
of  a  civilized  people. 

§  260.  Under  the  Protectorate  of  Cromwell  the  foundation  of 
England's  merchant  marine  was  laid  by  the  Navigation  Acts. 
The  Dutch  possessed  a  monopoly  of  the  carrying  trade,  which 
was  open  to  all.  Even  the  produce  of  the  British  colonies  was 
brought  to  England  in  Dutch  bottoms.  The  new  acts  prohibited 
the  importation  of  any  but  European  goods  in  any  but  English 
ships,  manned  three-fourths  by  Englishmen.     Upon  European 


278  ELEMENTS   OF   POLITICAL   ECONOMY. 

goods  imported  in  foreign  ships,  they  imposed  discriminating  du- 
ties. A  cry  went  up  at  once  that  England  was  ruined ;  the  goods 
that  must  be  had  from  abroad  were  far  more  in  amount  than  could 
be  brought  by  the  existing  merchant  marine,  or  any  that  could  be 
procured  for  years  to  come.  But  Cromwell  persisted,  and  by  the 
end  of  his  reign  the  Navigation  Acts  were  so  popular,  that  the 
first  Parliament  that  met  after  the  Restoration  reenacted  them  in 
full  at  the  very  opening  of  its  session.  They  took  care,  how- 
ever, to  exclude  Scotland,  which  Cromwell  had  treated  as  part  of 
England,  from  their  scope.  England  was  a  self-sufficient  and 
independent  country,  more  necessary  to  other  countries  than  other 
countries  were  to  her.  At  the  date  of  their  repeal  she  had  given 
up  that  position  ;  it  had  become  necessary  almost  to  her  existence 
that  she  should  have  free  access  to  the  markets  of  the  world. 
The  Dutch  sought  to  maintain  their  supremacy  on  the  seas  by 
force,  but  the  victories  of  Blake  confirmed  the  legislation  of 
Cromwell. 

§  261.  Under  the  later  Stuarts  the  policy  of  naturalizing 
every  species  of  industry  was  carried  out  with  more  or  less 
energy.  In  1677  appeared  '^  England^ s  Improvement  hy  Sea  and 
Land.  To  Outdo  the  Dutch  without  Fighting.  To  Fay  Debts 
without  Moneys.  To  set  at  Work  all  the  Foor  of  England  with 
the  Growth  of  our  own  Land.  .  .  By  Andrew  Yarranton, 
Gent."  The  author  had  taken  pains  to  see  how  foreign  trades- 
men turned  out  the  goods  that  were  in  such  demand ;  he  would 
have  his  countrymen  come  up  to  them  in  all  things.  Let  them 
import  the  skill  of  the  Grerman  and  the  Dutchman,  set  up  the 
linen  trade  and  the  iron  manufacture  at  home,  and  improve  their 
woollen  staples  by  getting  foreign  machines  and  workmen. 
From  this  time  the  statute  book  abounds  in  acts  to  accomplish 
these  ends,  and  unforeseen  occurrences  cooperated  with  them. 
The  last  great  persecution  of  the  French  Protestants  began,  and 
the  best  skilled  laborers  of  France  were  flying  across  her  border 
to  find  a  home  among  strangers.  England,  the  old  refuge  of 
the  persecuted,  got  her  full  share  of  them,  at  least  100,000 
skilled  artisans.  The  wares  made  in  England  were  only  plain 
articles  for  common  use.     "  The  chief  manufactures  among  us 


THE   HUGUENOTS   IN    ENGLAND.  279 

at  this  day  .ire  only  woollen  cloths,  woollen  stuffs  of  various 
sorts,  stockin«^s,  ribandiiigs,  and  perhaps  some  few  silk  stuffs, 
and  some  other  small  things  scarce  worth  the  naming ;  and 
those  already  mentioned  are  so  decayed  and  adulterated  that  they 
are  almost  out  of  esteem  both  at  home  and  abroad  "  (Fortrey, 
1693).  "  France  had  long  been  the  leader  of  fashion,  and  all 
the  world  bought  dress  and  articles  of  vertu  at  Paris.  Colbert 
was  accustomed  to  say  that  the  fashions  were  worth  more  to 
France  than  the  mines  of  Peru  were  to  Spain.  Only  articles 
of  French  manufacture,  with  a  French  name,  could  find  pur- 
chasers amongst  people  of  ftishion  in  London.  .  .  So  soon  as  the 
French  artisans  settled  in  London  they  proceeded  to  establish 
and  carry  on  the  manufactures  which  they  had  practised  abroad  j 
and  a  large  portion  of  the  stream  of  gold  which  before  had 
flowed  into  France  now  flowed  into  England.  They  introduced 
all  the  manufactures  connected  with  the  fashions"  (Smiles). 
The  hat  trade  especially  was  transferred  from  France  to  England, 
so  that  the  French  nobility  and  even  the  Roman  cardinals  had 
their  hats  made  by  the  Huguenots  at  Wandsworth.  Every 
species  of  woollens,  linens,  and  fine  hardware,  glass  and  paper, 
known  to  trade  was  produced  on  English  soil ;  the  silk  manu- 
facture, which  previous  attempts  had  failed  to  transfer  to  Eng- 
land, now  took  root,  and  England  soon  exported  large  quantities 
of  silk  fabrics.  To  cherish  the  industry,  the  duties  on  imported 
silks  were  trebled,  and  then  their  importation  prohibited. 
Strange  to  say,  all  classes  of  Englishmen  still  seem  to  think  there 
was  some  gain  to  the  nation  in  this  importation  of  French  skill, 
and  in  buying  goods  at  home  rather  than  in  sending  over  the 
seas  for  them.  The  historians  of  English  industry  point  to  this 
era  as  one  of  the  turning-points  in  the  development  of  England's 
industrial  greatness,  and  justly  pride  themselves  on  the  fact  that 
it  was  the  readiness  with  which  the  nation  opened  an  asylum  to 
the  persecuted  of  all  nations  that  led  to  the  building  up  her 
manufactures  and  the  improvement  of  their  processes.  On 
their  own  principles  they  should  see  no  difference  between 
making   these   things   at   home  and   buying  them  in   France. 


280  ELEMENTS    OF   POLITICAL   ECONOMY. 

§  262.  la  1771  the  iron  trade  was  taken  under  the  protection 
of  the  nation,  heavy  duties  on  its  importation  being  imposed. 
About  1787  very  great  improvements  in  the  method  of  its  manu- 
facture were  effected,  and  from  this  time  English  iron  was 
increasingly  protected  by  successive  tariffs,  till  in  1819  the  duty 
was  £6  10s.  a  ton,  although  for  years  previous  to  this  English 
makers  had  undersold  all  others  in  every  European  market.  In 
1834  it  was  reduced  to  £1  a  ton. 

But  woollens  were  still  the  great  staple  of  English  manufacture 
in  the  17th  and  18th  centuries,  and  every  care  was  taken  to 
protect  their  makers  from  foreign  competition.  In  1678  Indian 
cotton  goods  were  denounced  in  petitions  to  Parliament,  as 
threatening  the  ruin  of  the  woollen  trade.  Between  1700  and 
1736  their  importation  and  use  were  prohibited ;  then  the  law 
was  relaxed  to  allow  the  manufacture  of  mixed  woollen  and  cot- 
ton goods ',  in  1774  the  manufacture  of  cotton  goods  was  legal- 
ized, as  a  thing  which  "  ought  to  be  allowed  under  proper  regu- 
lations," among  which  were  provisions  to  make  sure  that  all  that 
was  worn  was  of  British  manufacture.  When  England  began 
this  manufacture,  India  could  supply  her  with  cottons  at  a  third 
the  cost  of  home  manufacture,  and  indeed  their  import  was  a 
chief  business  of  the  East  India  Company.  But  by  strenuous 
protective  measures,  she  developed  the  skill  of  her  people,  secured 
the  invention  of  better  machinery,  made  great  accumulations  of 
capital.  The  tariff  of  1819  still  prohibited  the  importation  of 
cotton  goods  made  east  of  the  Cape  of  Good  Hope,  and  imposed ' 
50  to  67  per  cent,  ad  valorem  duties  on  those  that  were  made  in 
Europe.  She  can  now  carry  the  cotton  of  Hindostan  and 
Georgia  over  land  and  sea,  spin  and  weave  it  into  stuffs,  and  then 
carry  it  back  to  undersell  the  American  and  the  Indian  manu- 
facturer, who  sees  the  staple  growing  under  the  windows  of  his 
factory.  Having  reached  this  point  she  throws  off  all  protective 
duties  and  invites  the  world  to  imitate  her  magnanimity. 

Tho  manufacture  of  cottons  (coatings),  seems  to  have  begun  at  Man- 
chester a\>out  IfilO,  the  material  being  imported  from  the  Levant.  Th* 
name  ocoars  much  earlier,  but  really  designates  woollen  fabrics. 


') 


England's  long  persistence.  281 

Ono  measure  of  protection  to  English  goods  was  the  prohibition  upon 
the  export  of  machinery  for  spinning,  weaving  or  printing  any  sort  of 
fabric ;  persons  who  "  enticed  any  artificer  to  go  to  foreign  parts  in  order 
to  practise  or  teach  his  trade "  were  liable  to  severe  punishment.  As 
late  as  1842,  the  export  of  flax  machinery  was  still  forbidden. 

§  263.  Since  the  time  when  the  chief  American  colonies  de^ 
Glared  and  secured  their  independence,  that  is  within  the  space 
of  a  century,  great  changes  in  the  industry  of  the  world  have 
taken  place.  It  has  been,  in  another  sense  than  the  old  phrase 
meant,  "  a  century  of  inventions."  James  Watt  devised  the 
condensing  steam-engine;  Hargreaves  the  spinning-jenny;  Ark- 
wright  the  spinning-frame  and  the  factory  system ;  Crompton 
the  mule-jenny ;  Cartwright  the  power-loom ;  Whitney  the 
cotton-gin;  Fitch  the  steamship;  Oliver  Evans  the  high-press- 
ure engine ;  Stephenson  the  locomotive ;  Morse  the  telegraph  ; 
Howe  the  sewing-machine.  All  these  and  a  thousand  less-noted 
inventions  have  added  new  arms  and  legs  to  capital  and  endowed 
the  rich  with  the  power  to  add  to  their  wealth,  to  make  steam 
and  iron  do  the  work  of  a  vast  multitude  of  human  hands.  No 
country  has  profited  so  vastly  by  these  inventions  as  England  ; 
none  has  guarded  with  such  jealousy  the  material  interests  upon 
which  she  now  bases  her  claims  to  greatness  among  the  nations. 
On  her  small  area  she  has  gathered  machines  that  do  the  work 
of  four  hundred  and  fifty  million  people.  Improved  means  of 
communication  have  put  her  at  the  door  of  every  other  people 
under  heaven.  Vast  accumulations  of  capital  and  the  sommand 
of  money  at  a  low  rate  of  interest,  have  enabled  her  to  watch  the 
shifts  and  changes  of  the  market,  to  destroy  hostile  competition 
by  temporary  sacrifices,  and  to  undersell  every  foreign  manu- 
facturer at  will.  Yet  not  until  almost  our  own  days  has  she  ever 
pretended  to  open  her  own  markets  to  the  competition  of  other 
nations,  and  in  very  great  measure  this  pretence  is  only  a  pretence. 

§  264,  We  have  seen  that  Napoleon  closed  the  market  of 
Europe  against  her  wares,  and  shut  her  out  from  all  parts  of  the 
Continent.  Even  Russia,  by  the  Peace  of  Tilsit  (1807)  joined 
the  Continental  system.  The  declaration  of  war  in  180.3  by 
Kugland,  when  the  ink  on  the  peace  of  Amiens  (1802)  was 


282  ELEMENTS   OF    POLITICAL   ECONOMY. 

"  hardly  dry  "  (Talleyrand),  was  largely  due  to  the  commerciai 
jealousy  of  England.  "The  emperor/'  Talleyrand  wrote  to 
Fox  in  1806,  "  does  not  think  that  this  or  that  article  of  the 
Treaty  of  Amiens  has  been  the  cause  of  the  war  ;  he  is  con- 
vinced that  the  true  cause  has  been  the  refusal  to  make  a  treaty 
of  commerce  against  the  industrial  and  manufacturing  interests 
of  his  subjects/'  But  the  overthrow  of  Napoleon,  and  the  re- 
lease of  European  nationalities  from  the  imperial  yoke,  did  not 
bring  to  England  the  permanent  open  market  that  she  expected. 
France  did  not  for  an  instant  relax  her  protective  system;  the 
Bourbons  watered  what  the  Corsican  had  planted.  Germany 
suffered  for  a  time  the  misery  of  a  sudden  paralysis  of  her  new- 
born industries,  but  the  rise  of  the  Zollverein  put  an  end  to 
this.  Russia  and  the  United  States,  after  a  period  of  Free  Trade 
and  industrial  depression,  both  went  back  to  Protection  in  1824. 
Much  the  same  was  the  course  of  events  all  over  Europe. 

The  revolt  of  the  Spanish-American  colonies  in  1810,  and  the 
consequent  destruction  of  the  Spanish  monopoly  of  their  trade, 
gave  an  opening  for  the  export  of  large  quantities  of  English 
goods,  which  was  eagerly  embraced.  The  thoughtfulness  engen- 
dered by  free  competition  was  finely  illustrated  3  cities  received 
consignments  of  Epsom  salts  suflBcient  to  physic  every  inhabitant 
once  a  day  for  two  or  three  generations  to  come;  to  others,  in 
which  ice  and  snow  had  never  been  seen,  whole  cargoes  of  skates 
and  pattens  were  sent.  This  reckless  trading  to  the  supposed 
Eldorados  of  the  West,  had  its  necessary  results  in  a  violent 
commercial  panic. 

§  265.  Up  to  1832  England  was  governed  by  the  upper 
classes,  "  the  landed  interest,"  who  had  influence  enough  to  re- 
turn the  majority  of  her  House  of  Commons.  By  the  Reform 
Bill  of  that  year,  such  a  redistribution  of  seats  was  effected,  as 
transferred  the  power  to  the  middle  classes,  who  were  chiefly 
interested  in  manufactures.  "Since  1832  we  have  had  a  sys- 
tematic course  of  legislation,  in  which  the  wants  and  the  wishes 
of  the  middle  classes  have  been  carefully  attended  to,  and  their 
interests  habitually  consulted.     But  we  have  seen  no  signs  of 


THE   INDUSTRIAL   REVOLUTION.  283 

the  same  solicitude  with  respect  to  the  necessities  and  interests — 
certainly  not  less  pressing  nor  less  important — of  the  working 
classes." — (^London  Morning  Post).  This  gradually  gave  a  new 
direction  to  the  industrial  policy  of  the  country,  and  led  to 
changes  in  the  legislation.  The  old  restrictive  duties  upon  for- 
eign manufactures  were  removed  or  greatly  reduced,  in  the  hope 
that  the  example  would  have  the  eflfect  of  leading  other  peoples 
to  throw  open  their  markets  to  British  goods.  The  protection 
given  to  British  agriculture  by  the  Corn  Laws,  was  removed, 
in  order  to  secure  cheaper  food  for  the  P^nglish  laborer,  and  keep 
"  the  natural  and  necessary  rate  of  wages  "  at  the  lowest  point, 
so  that  the  loom-lords  might  be  able  to  sustain  competition  in 
the  price  of  their  fabrics.  From  this  era  England  has  steadily 
and  unceasingly  preached  the  beauties  and  benefits  of  unre- 
stricted trade,  and  professed  her  repentance  for  the  worse  than 
blunders  of  her  former  method,  declaring  that  her  own  "  experi- 
ence has  fully  proved  the  injurious  effect  of  the  protective  sys- 
tem and  the  advantage  of  low  duties  upon  manufactures." 
(^Government  Minute j  1859).  Homines  facile  crediint  id  quod 
vol  lint  (CiBsar). 

"Mr.  Pitt  in  1787  found  our  customs-law  a  mass  of  intricacy  and  con- 
fusion. *  The  mode  in  which  he  proposed  to  remedy  this  great  abuse  was 
by  abolishing  all  the  duties  which  now  subsisted  in  this  confused  and 
complex  manner,  and  to  substitute  in  their  stead  one  single  duty  on  each 
article,  amounting,  as  nearly  as  possible,  to  the  aggregate  of  all  the  vari- 
ous subsidies  already  paid.'  Also,  '  in  some  few  articles,'  for  example 
timber,  he  meant  to  introduce  'regulations  of  greater  extent,'  but  such 
was  the  general  scope  of  his  arrangement.  During  the  war  and  during 
the  first  years  of  peace,  many  augmentations  of  duty  took  place,  some 
for  purposes  of  revenue,  but  with  the  effect  of  enhancing  the  stringency 
of  protection  ;  some  for  protective  purposes  alone.  The  tariff  underwent 
a  general  revision  in  1819,  .  .  .  and  again  under  the  government  of  Lord 
Grey,  a  largo  number  of  minor  duties  were  reduced  in  18.32  and  1833,  but 
it  was  in  the  interval  between  these  two  periods  that  the  most  important 
relaxations  of  the  prohibitory  and  protective  system  were  introduced  int) 
the  law,  first  by  Mr.  Wallace  [1823],  and  afterwards  and  principally  by 
Mr.  Huskisson  [1823-27].  Still  it  continued  to  contain  some  prohibitions 
and  a  very  great  number  of  prohibitory  rates  of  duty ;  and  no  approxi- 
mation to  unity  of  principle  was  discernible  in  its  structure  as  a  whole. 
In  1842  it  was  attoiupt^jd  to  mxke  an  approach  to  the  following  rules; 


284  ELEMENTS    OF   POLITICAL   ECONOMY. 

(1).  The  removal  of  prohibitions.  (2).  The  reductitn  of  duties  on  mana« 
factured  articles,  and  of  protective  duties  generally,  to  an  average  of  20 
per  cent,  ad  valorem.  (3).  On  partially  manufactured  articles  to  rates 
not  exceeding  10  per  cent.  (4).  On  raw  materials  to  rates  not  exceeding 
6  per  cent.  The  duties  were  then  reduced  on  about  660.  articles." 
(Gladstone.) 

The  tariflFs  of  1845-6  still  further  reduced  duties,  leaving  those  on  silk 
at  15  per  cent.;  on  made-up  fabrics  of  other  material,  10  per  cent.;  not 
made-up,  free.  The  corn  laws  were  finally  repealed  in  1849,  and  the  dis- 
crimination in  favor  of  colonial  sugar  abolished  in  1851.  The  tariff  of 
1853  fixed  10  per  cent,  as  the  maximum  on  all  manufactures  except  silk, 
and  abolished  various  unproductive  duties.  It  substituted  specific  for 
ad  valorem  rates.  The  French  Treaty  of  1860  abolished  the  duties  on 
French  manufactures.  The  chief  changes  since  1853  have  been  the  re- 
moval or  reduction  of  revenue  duties  on  articles  in  general  use, — tea, 
sugar,  and  the  like.  All  these  tariffs  admit  the  principle  of  discrimina- 
tion in  favor  of  home  industry. 

§  266.  With  the  very  partial  exception  of  France  (§  258), 
no  continental  people  has  followed  English  example.  "  There 
is  no  doubt/'  says  The  (London)  Economist,  "that  Free  Trade 
is  one  of  the  most  unpopular  things  in  practice  in  the  world." 
It  has  not  enabled  England  to  hold  the  position  of  industrial 
superiority  that  she  once  did.  "  We  have  now/'  says  a  Free 
Trade  authority,  "  many  rivals,  where  thirty  or  forty  years  ago 
we  had  none ;  we  formerly  supplied  nations,  which  now  partially 
or  entirely  manufacture  for  themselves;  we  formerly  had  the 
monopoly  of  many  markets,  where  we  are  now  met  and  under- 
sold by  young  competitors.  To  several  quarters  we  now  send 
only  that  portion  of  their  whole  demand,  which  our  rivals  are 
at  present  unable  to  supply.  A  far  larger  proportion  of  our 
production  now  than  formerly  is  exported  to  distant  and  unpro- 
ducing  countries,  ...  to  our  own  colonies  and  our  remote  pos- 
sessions. More,  relatively,  is  sent  to  Africa  and  America,  and 
less  to  Europe.  Countries  which  we  formerly  supplied  with  the 
finished  article,  now  take  from  us  only  the  half-finished  article 
or  the  raw  material.  Austria  meets  us  in  Italy;  Switzerland 
and  Germany  meet  us  in  America;  the  United  States  meet  us 
in  Brazil  and  China.  We  formerly  sent  yarn  to  Russia ;  we  now 
Bend  cotton-wool;  wo  sent  plain  and  printed  calicos  to  Germany, 


CONTINENTAL  WARES  IN  ENGLAND.       285 

we  now  send  mainly  the  yarn  for  making  tlicm.  All  these 
countries  produce  more  cheaply  than  we  do, — but  as  yet  they 
are  not  producing  e/ioM^A;  we  therefore  supplement  them  .  .  . 
Henceforth  our  manufacturing  industry  can  increase  only,  not 
by  underselling  or  successfully  competing  with  our  rivals,  but  by 
the  demand  of  the  world  increasing  faster  than  our  rivals  can 
supply.  This  is  .  .  .  preeminently  the  case  with  our  chief 
manufjicture,  the  cotton."  (7%e  North  British  Review,  1852.) 
Be  it  noted  that  these  rivals  who  now  compete  on  equal  terms 
with  England  in  the  markets  foreign  to  both,  are  nations  who 
first  refused  to  compete  with  her  in  their  own  home  markets. 
They  developed  under  the  shelter  of  protective  tariffs  the  skill 
and  the  capital,  which  have  enabled  them  to  emulate  her  as  a 
producing  and  an  exporting  nation. 

§  267.  Even  in  the  English  home  market  the  competition  of 
foreign  manufacturers  has  been  keen  and  effective.  Many  minor 
branches  of  trade,  which  cannot  secure  a  voice  in  Parliament 
and  some  sort  of  indirect  protection,  have  been  nearly  ruined. 
For  instance,  the  cheap  labor  of  Norway  and  Belgium  and  the 
access  to  abundance  of  timber,  have  enabled  those  countries  to 
export  doors  and  window-frames  at  prices  with  which  English 
house-carpenters  cannot  compete,  and  great  numbers  of  them 
have  been  obliged  to  emigrate.  The  larger  industries  have  not 
escaped.  The  abolition  of  duties  on  French  manufactures  in 
1860  simply  destroyed  the  extensive  manufactures  of  silk  in 
Coventry  and  Macclesfield,  and  sent  hosts  of  their  workmen  to 
the  poor-house.  The  importation  of  French  silks  was  quadrupled. 
English  statesmen  looked  on,  suppressing  all  national  instincts 
for  the  sake  of  a  theory,  and  exhorted  the  silk-weavers  to  im- 
prove their  machines  and  processes,  or  else  take  to  something 
else.  Formerly  Coventry  and  Macclesfield  competed  with  Lyons 
for  the  American  market.  Now  the  competition  is  only  between 
the  French  and  the  American  silks.  So  in  less  degree  of  the 
iron  trade,  the  paper  trade,  and  even  the  cotton  trade.  Thirty 
Prussian  locomotives  are  running  on  one  English  railway,  and  the 
massive  girders  of  the  new  St.  Thomas's  Hospital,  under  the  very 


286  ELEMENTS   OF    TOLITICAL    ECONOMY. 

windows  of  the  Houses  of  Parlianient,  were  forged,  framed  and 
fitted  in  Belgium,  after  a  free  and  open  competition  in  which  a 
dozen  English  manufacturers  joined.  Englishmen  ask  why  is  this, 
and  find  the  answer  :  The  foreign  workman  outdoes  the  English 
in  efi"ectiveness,  because  he  is  better  trained  and  educated,  and  the 
natural  organization  of  labor  has  been  carried  almost  to  perfection 
The  Continental  states  do  not  leave  everything  to  the  scramble  of 
free  competition  ;  they  have  no  faith  in  the  Laissez  faire  maxim. 
They  make  temporary  sacrifices,  such  as  the  outlay  on  popular 
education,  both  directly  to  schools  and  teachers,  and  indirectly 
by  protective  tariffs,  and  reap  benefits  manifold. 

See  an  article  on  "  Continental  Iron  Works  Supplying  English  Mar- 
kets," copied  into  LitteU'a  Living  Age  for  May  23d,  1868,  from  The  London 
Beviexo.     The  writer  tells  this  story  : 

"An  English  manufacturer  met  a  friend  the  other  day  in  London. 
'What  are  you  doing  here?'  he  said.  The  other  told  him  in  confidence 
that  he  was  waiting  to  know  the  result  of  a  competition  for  a  large 
quantity  of  work.  '  I  fully  expect  the  order/  he  said,  *  for  I  have  tendered 
at  a  price  by  which  we  shall  lose,  merely  to  keep  the  works  open.'  The 
other  asked  if  he  had  any  objection  to  exchange  figures  with  him,  as  all 
the  tenders  were  in,  and  he  had  himself  tendered  for  a  Belgian  firm.  The 
Englishman  named  his  price.  *  You  may  go  home  then  !'  said  the  other. 
*  I  am  fifteen  shillings  a  ton  below  you,  and  it  will  pay  our  firm  very  well 
at  that  price.' " 

In  1874,  when  the  iron  trade  at  home  was  especially  depressed  by  the 
sudden  cessation  of  the  demand  in  many  parts  of  the  world,  following 
the  panic  of  1873,  the  English  government  sent  out  a  commission  to 
inquire  upon  what  terms  and  of  what  quality  Belgian  iron,  especially 
ehip-plates,  and  bars  and  sheets  used  in  ship-building,  could  be  imported 
for  the  Admiralty.  They  did  so  because  they  found  that  Belgian  iron  in 
general  could  be  had  at  lOs.  to  20s.  a  ton  cheaper  in  London  than  Eng- 
lish could;  and  because  this  particular  class  of  iron  was  monopolized  by 
a  few  firms,  and  cost  £10  a  ton  more  than  it  would  in  Belgium.  On  free 
trade  principles,  the  government  was  perfectly  right.  "  Buy  where  you  can 
buy  the  cheapest,"  is  the  first  maxim  for  governments  and  for  peoples, 
laid  down  by  their  English  exponents.  But  there  is  a  difference  between 
"  your  ox  "  and  "  my  bull."  The  English  correspondent  of  an  American 
paper  tells  us  how  Englishmen  took  the  news  of  this  commission  : — 

"  So  far  as  I  can  ascertain  little  sympathy  dwells  in  the  English  heart 
towards  the  commission.  Pecuniary  advantages  when  opposed  to  national 
advantages  must  ever  be  ousted.  And  I  think,  with  many  others,  chat 
the  present  is  a  question   wherein   the  former  would  operate  a«itago 


WILL    ENGLAND    TERSIST  ?  287 

nistically  towards  the  latter.  If  government  specifications  wore  difitrib- 
uted  exclusively  amongst  our  foreign  competitors,  they  and  their  workmen 
would  proportionately  swell  in  opulence  and  manufacturing  supremacy 
in  the  departments  embraced,  as  ours  descended.  Further,  it  is  regarded 
as  most  significant  that  a  Tory  government  should  have  ventured  even 
upon  a  preliminary  investigation  of  the  policy  of  going  out  of  the  country 
for  government  iron.  Wo  are  now  thirty  years  from  1814.  What  would 
have  been  thought  of  the  prophet  who  should  have  committed  himself  to 
the  prophecy  that  "in  1874  Mr.  Disraeli  would  seriously  think  of  buying 
foreign  iron  for  our  own  ships  of  war  ?  To  buy  foreign  bread  for  our  own 
mouths  was  considered  bad  enough,  but  to  buy  abroad  our  very  bulwarks 
would  have  been  thought  absolute  treason." 

§  268.  Will  England  persist?  Possibly  she  will.  Her 
middle  classes,  at  least,  retain  their  faith  in  the  sacredness,  the 
almost  divinity  of  free  competiti-on,  and  their  belief  that  the 
sphere  and  duties  of  government  extend  no  farther  than  to  keep- 
ing each  man's  hands  off  his  neighbor's  throat  and  pocket.  With 
Mr.  Gladstone,  they  pity  the  benighted  protectionists  abroad,  as 
a  zealous  Christian  pities  the  heathen.  "  I  venture,"  he  says 
in  1871,  "that  there  is  not  the  prevalence  of  enlightened  views 
upon  the  subject  that  we  desire  in  America;  although  it  has  a 
strong  free  trade  party,  yet  the  prevalence  of  these  opinions  is 
by  no  means  assured.  In  our  own  colonies — I  say  it  with  deep 
regret — in  our  own  colonies  there  are  very  strong  and  consider- 
able tendencies  towards  the  establishment  of  what  we  call  the 
exploded  system  of  protection.  I  also  must  say,  and  it  is  with 
much  pain,  that  the  course  of  affairs  in  France  is  very  different 
from  that  which  we  wish  it  to  be."  They  still  exult  in  the  con- 
sciousness that  they,  and  they  alone,  have  found  the  key  to  all 
industrial  problems,  and  lament  the  invincible  ignorance  of 
political  economy  that  prevails  in  the  United  States  (Specfatory 
1874)  and  other  protectionist  countries.  As  this  class  gives  us 
pretty  nearly  all  the  English  literature  of  our  days,  it  is  the 
common  impression  that  there  is  no  dissent  from  its  teachings. 
"  It  would  seem  as  though  we  freetraders  had  become  nearly  as  bigoted 
in  favor  of  free  trade  as  our  former  opponents  were  in  favor  of  protection. 
Just  as  they  used  to  say,  *  We  are  right :  Why  argue  the  question  ?'  so 
now,  in  the  face  of  the  support  of  protection  by  all  the  greatest  minds  in 
Amerioa,  all  the  first  statesmen  of  the  Australians,  we  tell  the  New  Eng- 


288  ELEMENTS   OF    POLITICAL   ECONOMY. 

land  and  the  Australian  politicians  that  *  We  will  not  discuss  protectioc 
with  them,  because  there  can  be  no  two  minds  about  it  among  men  of  in- 
telligence and  education.  We  will  hear  no  defence  of  national  lunacy/ 
we  say.  If,  putting  aside  our  prejudices,  we  consent  to  argue  with  an 
Australian  or  American  protectionist,  we  find  ourselves  in  difiiculties.  Aa 
far  as  we  in  our  island  are  concerned  it  {i.  e.  free  trade)  is  so  manifestly 
to  the  pocket  interest  of  almost  all  of  us,  and  at  the  same  time  on  account 
of  the  minuteness  of  our  territory,  that  for  Britain  there  can  be  no  danger 
of  a  deliberate  relapse  into  protection." — Dilke's  Greater  Britain. 

§  269.  But  the  Reform  Bill  carried  by  Mr.  Disraeli  in  1868, 
by  establishing  household  suffrage,  has  effected  a  second  trans- 
fer of  power  in  England,  to  wit:  from  the  middle  to  the  lower 
classes.  The  latter  gave  no  hearty  support  to  the  great  agita- 
tion for  the  abolition  of  the  corn  laws.  Ebenezer  Elliott,  the 
poet  of  that  struggle,  wrote  in  1849,  "  It  is  remarkable  that 
free  trade  has  been  carried  by  the  middle  classes,  not  only  with- 
out the  assistance  of  the  working  classes,  but  in  spite  of  their 
opposition."  Senior  expressed  his  fear  that  if  the  extension  of 
representative  government  should  increase  the  power  of  public 
opinion  over  the  policy  of  nations,  "  commerce  may  not  long  be 
enabled  to  retain  even  that  degree  of  freedom  which  she  now 
enjoys."  Chalmers  says  :  "  This  is  a  subject  on  which  the  popu- 
lar and  philosophic  minds  are  not  at  all  in  harmony,"  and  ex- 
presses the  same  fear  as  Senior  does,  as  to  what  would  result 
from  "  the  very  admission  into  Parliament  of  so  large  an  influ- 
ence from  the  will  of  the  humbler  classes."  Kingsley  speaks  of 
the  artisans  of  the  great  cities  as  "sneering  and  growling  at  Mr. 
Cobden's  harangue — '  Cheap  bread !  curse  him,  he  means  cheap 
wages  !'  " 

§  270.  What  direction  will  this  new  political  element,  as  it 
gradually  makes  itself  felt  in  Parliament,  give  to  legislation, 
especially  as  regards  economical  matters  ?  English  students  of 
its  tendencies  say  that  (1)  it  will  be  intensely  Nationalist.  It  will 
insist  on  the  nation  having  a  foreign  policy  of  its  own  j  it  will 
fight  when  its  blood  is  up,  whether  Manchester  suffers  or  not. 
It  will  look  at  matters  through  English  spectacles,  not  cosmopo- 
litan ones,  and  trust  more  to  national  instincts  and  impulses 
than    to   fine-spun   theories.     A   Parliament,  then,  that  really 


THE   LOWKR   CLASSES   IN   POWER.  289 

represented  this  class  would  not  sit  with  folded  hands  and  seo 
Macclesfields  and  Coventrys  go  to  ruin,  because  somebody  had 
made  a  book  argument  about  free  trade  that  was  thought  unan- 
swerable. (2)  The  theory  of  government  held  by  this  class  is 
very  different  from  the  Laissez  /aire  notion  of  the  class  just 
above  it.  It  has  not  been  the  vigorous,  strong,  prosperous  part 
of  society  that  chiefly  wanted  the  state  to  get  out  of  its  way. 
Eather  it  has  been  in  great  need  of  a  helping  hand  from  the 
constituted  authorities.  The  state  (apart  from  the  policeman, 
to  whose  functions  the  "  let  alone"  school  would  reduce  govern- 
ment) has  mostly  been  the  workingman's  best  friend  and  pro- 
tector. He  has  no  scruples  and  no  grudges  about  giving  it 
pretty  large  scope  of  action.  If  any  one  will  make  it  pretty 
clear  to  Irim  that  the  drift  of  legislation  can  help  him  to  more 
work  and  better  pay,  he  will  look  for  that  help.  (3)  Being 
themselves  very  directly  a  producing  class,  they  are  not  so 
likely  to  see  the  axiomatic  force  of  the  free  trade  maxims : 
"  Every  man's  interest  as  a  consumer  is.  the  interest  of  society ; 
every  man's  interest  as  a  producer  is  the  interest  of  a  class. 
Let  all  legislation  be  for  the  good  of  the  consumer,  because  his 
interest  always  represents  the  interests  of  society  and  the  good 
of  the  whole  nation." 

The  agitation  against  free  trade  which  began  in  England  among 
the  working  classes  soon  after  the  American  Civil  War  has  spread 
also  to  the  farming  class,  under  the  stress  of  American  competi- 
tion. It  is  still  confined  to  a  minority,  but  the  minority  is  grow- 
ing ;  and  this  issue  has  sufficed  to  decide  several  elections  of 
members  to  the  Imperial  Parliament.  It  does  not  want  for  rep- 
resentatives among  the  intellectual  classes,  and  it  is  admitted  thut 
Mr.  Cobden's  work  is  now  subjected  to  an  amount  and  degree  of 
criticism  which  would  have  been  thought  quite  impossible  at  the 
time  of  his  death.  The  main  answer  to  the  protectionists  is  that 
they  can  propose  nothing  which  will  furnish  any  practical  solu- 
tion of  the  difficulties  they  complain  of.  Mere  protection  will 
certainly  do  nothing  for  England,  unless  as  accompanying  meas- 
ures to  restore  the  English  people  to  the  use  and  enjoyment  of 
19 


290  ELEMENTS    OF    POLITICAL    ECONOMY. 

the  land  of  England  (§  86).  Protection  is  useful  only  as  it  tends 
to  a  healthy  equilibrium  of  the  industries  (§  33).  At  the  time 
of  the  Reformation  two  to  one  of  the  English  people  were  en- 
gaged in  agriculture.  At  present  the  proportion  is  less  than  one 
to  three,  a  sixfold  change  in  three  hundred  years.  For  this  dis- 
aster the  "  Fair  Traders  "  have  no  remedy.  They  propose  a  sys- 
tem  of  retaliation,  which  England  cannot  aflford  and  her  working 
people  would  not  endure.  The  land  question  is  everything,  and 
there  is  needed,  not  a  break-up  of  the  great  estates,  but  a  return 
to  small  farms. 

§  271.  The  colonies  who  form  part  of  the  British  empire 
are  as  slow  to  adopt  the  English  theory  as  are  industrial  nations 
nearer  home.  Canada  until  1879  imposed  a  tariff  for  revenue 
upon  imported  manufactures,  which  fostered  a  few  of  her  weaker 
industries,  and  thus  excited  unfriendly  comment  in  England.  Her 
policy  was  sketched  as  follows  by  Mr.  (now  Sir  Alexander)  Gait, 
her  Finance  Minister,  in  a  speech  made  in  Eligland  in  1859 :  "  The 
fiscal  policy  of  Canada  has  invariably  been  governed  by  the  amount 
of  revenue  required.  It  is  no  doubt  true  that  a  large  and  influ- 
ential party  exists  who  advocate  a  protective  policy;  but  this 
policy  has  not  been  adopted  by  either  the  government  or  the 
legislature,  although  the  necessity  of  increased  taxation  for  the 
purposes  of  revenue  has  to  a  certain  extent  compelled  action  in 
partial  unison  with  tbeir  views,  and  has  caused  more  attention 
to  be  given  to  the  proper  adjustment  of  the  duties,  so  as  neither 
unduly  to  stimulate  nor  depress  the  few  branches  of  manufac< 
ture  which  exist  in  Canada.  .  .  .  The  government  have  no 
expectation  that  the  moderate  duties  imposed  by  Canada  can 
produce  any  considerable  development  of  manufacturing  indus- 
try ;  the  utmost  that  is  likely  to  arise  is  the  establishment  of 
works  requiring  comparatively  unskilled  labor,  or  of  those  com- 
peting with  America  for  the  production  of  goods  which  can  be 
equally  well  made  in  Canada,  and  which  a  duty  of  twenty  per 
cent,  will  n:)  doubt  stimulate."  So  willing  was  tb.  Canada  of 
that  day  to  serve  as  an  appendage  to  the  industrial  system  of 
England. 


CANADA'S   PASSIVE   POLICY.  291 

Three  years  later  (1862)  Mr.  Gait  assured  the  Manchester 
Chamber  of  Commerce  that  Canada  had  no  purpose  to  close  its 
market  on  them.  "  The  best  evidence  that  could  be  offered 
against  the  charge  of  Protection  was  that  the  effect  of  the 
tariff  had  not  been  to  produce  manufactures.  The  manufac- 
tures of  Canada  were  those  that  might  be  expected  in  a  new 
country — nails,  steam-engines,  coarse  woollens,  and  other  arti- 
cles necessary  in  a  newly  settled  country.  There  was  not  at  this 
moment  a  single  cotton  mill  in  Canada,  nor  a  silk  manufactory. 
The  imports  of  earthenware  and  glass,  hardware  and  iron,  had 
gone  on  increasing  every  year  from  1859  till  the  present  year." 

Even  this  meekness  was  not  enough;  he  was  asked  why 
Canada  did  not  raise  her  revenue  by  direct  taxation  on  land  and 
income  j  these  revenue  duties  had  been  thrown  in  their  teeth  in 
Europe.  It  had  been  said  :  "  Can  you  expect  us  to  throw  off 
all  duties  on  British  goods,  when,  your  own  colonies  tax  them 
fifteen  per  cent?"  He  retorted  that  such  questions  would  come 
with  better  grace  if  England  did  not  raise  £28,000,000  a  year 
by  customs,  and  £17,000,000  by  excise  duties.  Direct  taxation 
might  be  best;  but  it  was  also  a  luxury  that  a  poor  and  thinly- 
settled  country  could  not  indulge  in. 

Knowing  that  a  mere  passive  policy  was  not  sufficient  to  build 
up  a  new  country,  Canada  pursued  with  zeal  and  energy  the  tra- 
ditional policy  of  directly  aiding  immigration  from  the  Old 
World,  instead  of  attaining  the  same  end  indirectly  by  making 
the  Dominion  a  place  eminently  well  worth  settling  in.  She 
used  the  money  raised  by  taxation  to  pay  the  expense  of  these 
new-comers;  if  she  had  taxed  foreign  productions  at  a  highor 
rate,  they  would  have  come  without  her  help.  But  she  was  "  all 
the  time  pouring  water  into  a  cask  with  a  hole  in  it.  Allowing 
for  great  exaggeration  in  the  reported  numbers  of  French-Cana- 
dian emigrants  to  the  United  States,  we  fear  that  for  two  emi- 
grants whom,  with  much  expense  and  with  great  labor,  we  bring 
over,  we  probably  lose  three.  But  little  account  is  taken  of  the 
emigrants  who  are  lost,  because  they  are  mainly  withdrawn  from 


292  ELEMENTS    OF   POLITICAL    ECONOMY. 

manufactures,  and  agriculture  is  the  government's  sole  care" 
(^Canadian  Monthly). 

Canada  had  bought  in  the  cheapest  market  and  sold  in  the 
dearest  that  she  could  find,  with  no  thought  of  creating  better, 
nearer  and  steadier  markets  than  any  she  could  find  ready- 
made.  Her  wise  marketing  did  not  prevent  her  from  being 
a  poor  and  backward  country.  She  did  the  easiest  thing,  and 
made  no  sacrifices  from  the  first;  had  lived  from  hand  to  mouth; 
was  wise  with  her  pennies  and  foolish  with  her  pounds;  saved 
at  the  spigot  and  wasted  at  the  bung.  And,  therefore,  the  tide 
of  population  moved  over  her  border  into  the  United  States — 
away  from  the  land  of  low  taxation  and  free  choice  of  markets 
to  the  land  of  high  taxes  and  home  markets.  She  could  not 
keep  the  Europeans  who  came  into  her  ports  with  half  a  mind 
to  stay.  Her  own  people  sold  land  and  houses  at  a  sacrifice,  and 
sought  a  home  in  New  York  and  New  England. 

"  By  describing  one  side  of  the  frontier,"  says  Lord  Durham 
in  a  celebrated  report,  "  and  reversing  the  picture,  the  other 
would  be  described.  On  the  American  side  all  is  activity  and 
bustle.  The  forest  has  been  widely  cleared  ;  every  year  numer- 
ous settlements  are  formed,  and  thousands  of  farms  are  created 
out  of  the  waste;  the  country  is  intersected  with  common 
roads On  the  British  side  of  the  line,  with  the  excep- 
tion of  a  few  favored  spots,  where  some  approach  to  American 

prosperity  is  apparent,  all  seems  waste  and  desolate The 

aocient  city  of  Montreal,  which  is  naturally  the  capital  of 
Canada,  will  not  bear  the  least  comparison,  in  any  respect,  with 
Buffalo,  which  is  the  creation  of  yesterday.  But  it  is  not  in  the 
difference  between  the  large  towns  that  we  shall  find  the  best 
evidence  of  our  inferiority.  That  painful  but  most  undeniable 
truth  is  most  manifest  in  the  country  districts,  through  which 
the  line  of  natural  separation  passes,  for  a  distance  of  a  thou- 
sand miles.  There  on  the  side  of  both  the  Canadas,  and  also 
of  I^ew  Brunswick  and  Nova  Scotia,  a  widely -scattered  popula- 
tion, poor  and  apparently  unenterprising,  though  hardy  and 
industrious,  separated  from  each  other  by  tracts  of  intervening 


CANADA  WANTS   RECIPROCITY.  293 

forests,  without  towns  or  markets,  almost  without  roads,  living 
in  mean  houses,  drawing  little  more  than  a  rude  subsistence 
from  ill-cultivated  land,  and  seemingly  incapable  of  improving 
their  condition,  present  the  most  instructive  contrast  to  their  en- 
terprising and  thriving  neighbors  on  the  American  side 

Throughout  the  frontier,  from  Amherstburgh  to  the  ocean,  the 
market  value  of  land  is  much  greater  on  the  American  than  oa 
the  British  side.  In  not  a  few  parts  this  difference  amounts  to 
a  thousand  per  cent I  am  positively  assured  that  supe- 
rior natural  fertility  belongs  to  the  British  side.  In  Upper 
Canada,  the  whole  of  the  great  peninsula  between  Lakes  Erie 
and  Huron,  comprising  nearly  half  the  available  land  of  the 
province,  is  generally  considered  the  best  grain  country  of  the 
American  continent." 

In  1856-1866  we  had  a  treaty  of  reciprocity  with  Canada. 
She  admitted  free  a  few  of  our  coarser  manufactures,  on  condi- 
tion that  we  should  throw  open  our  markets  to  her  agricultural 
products.  When  the  arrangement  was  made  it  was  not  very 
unfair,  but  it  became  so  after  the  adoption  of  the  protective 
policy  by  America  in  1861.  AVhen  the  time  fixed  for  its  ex- 
piry came,  Ameri<ja  refused  to  renew  it,  and  has  repeated  that 
refusal  as  oflen  as  it  has  been  asked. 

A  much  broader  proposal  than  that  for  reciprocity  has  been 
made  on  both  sides  of  the  border.  Canada  and  America  are  parts 
of  a  great  area  which  seems  to  be  designated  by  nature  for  unre- 
stricted intercourse.  Each  of  the  three  groups  of  provinces  of 
which  the  Dominion  is  composed  has  closer  relations  naturally 
with  the  adjacent  American  States  than  with  the  other  provinces. 
The  customs  line  which  sunders  the  two  countries  is  excessively 
costly  to  both.  A  customs-union,  if  effected  on  the  basis  of  a 
common  protective  tariff,  with  distribution  of  receipts  propor- 
tionally to  population,  would  bring  Canada  into  closer  relations 
to  the  continent  to  which  she  belongs  naturally,  while  it  would 
enable  both  countries  to  confine  their  custom-house  line  to  the 
seashore. 


294  ELEMENTS   OF   POLITICAL   ECONOMY. 

The  possibility  of  such  an  arrangement  has  been  increased  by 
the  adoption  of  a  Canadian  protective  tariff  in  1879.  In  that 
year  the  Tory  party,  then  in  opposition,  took  up  this  issue  at  the 
general  election,  and,  to  their  own  surprise  and  that  of  their  ene- 
mies, secured  a  working  majority  in  behalf  of  this  national  policy. 
Of  course  manufactures  carried  on  within  so  small  an  area  and 
for  the  benefit  of  so  small  a  population  as  that  of  Canada  cannot 
be  expected  to  exhibit  the  rapid  and  vigorous  growth  which  is 
seen  in  those  of  America.  But  already  the  new  tariff  has  done 
much  for  the  welfare  of  the  Dominion  in  diversifying  her  indus- 
tries, furnishing  employment  for  her  surplus  labor,  and  bringing 
the  farmer  and  the  artisan  into  close  and  helpful  relations. 

See  Isaac  Buchanan,  M.  P.,  On  the  Industrial  Resources  of  America 
(Montreal,  1864),  a  chaotic  compilation  edited  by  Henry  J.  Morgan. 
Mr.  Buchanan  is  the  leading  Protectionist  of  the  Dominion,  and  belongs 
to  the  school  of  Henry  C.  Carey.  The  most  original  and  able  writer  of 
the  party,  known  to  us,  is  John  Maclean  {Free  Trade  and  Protection, 
Montreal,  1868). 

§  272.  The  Australian  colonies  have  been  much  more  decided 
and  independent  than  those  of  British  America,  a  fact  largely 
due  to  the  enterprising,  wide-awake  character  of  the  popula- 
tion, whom  the  gold  discoveries  took  thither.  They  have  made 
fair  trial  of  free  trade,  which  they  now  scout  as  "  an  antipodean 
doctrine,"  while  protection  is  their  national  creed.  It  commands 
an  ever-increasing  majority  in  the  colonial  legislatures ;  it  is  the 
avowed  principle  of  "  all  their  first  statesmen ;"  it  is  especially 
the  doctrine  upheld  and  acted  upon  by  the  liberal  and  progres- 
sive party,  while  the  old  sheep-farming  aristocracy  are  at  once  the 
Conservative  and  the  Free  Trade  party.  The  policy  of  cherish- 
ing a  varied  industry  is  drawing  the  colonies  closer  together,  and 
has  led  to  the  first  steps  towards  a  Federative  Union.  All 
classes  but  one  are  full  of  enthusiasm  for  the  industrial  inde- 
pendence of  Australia.  '■'■  No  British  Goods  Sold  Here"  is 
the  sign  by  which  an  Australian  tradesman  wooes  popularity 
and  custom.  Dishonest  dealers  tear  off  the  British  labels  from 
imported  goods,  and  substitute  one  which  marks  them  as 
Colonial  make.     This  people  are  straining  every  nerve  to 


AUSTRALIA  HAS  REASONS.  295 

develop  a  varied  industry  and  bring  the  fanner  and  (he  artisan 
into  neighborhood ;  they  have  no  idea  of  keeping  up  workshops 
at  the  antipodes.  They  *'  would  rather  import  that  which 
should  produce  the  commodities  than  the  commodities  them- 
selves.'' They  want  a  free  trade  that  will  not  mean  the  "  mono- 
poly for  British  manufactures,"  "  and  their  chief  object  is  to 
put  down  monopoly  by  extending  the  sphere  of  competition." 

§  273.  "  But  you  are  taxing  your  consumers  for  the  benefit  of 
the  producers.  As  well  break  all  the  windows  in  your  houses  in 
order  to  keep  glaziers  in  work."  No  proof  that  a  percentage  of 
loss  is  incurred  by  protection  deters  them.  "  A  digger  at  Bal- 
larat  told  me  that  he  knew  that  under  a  protective  tariflF  he  had 
to  pay  higher  for  his  jacket  and  moleskin  trousers,  but  that  he 
preferred  to  do  this,  as  by  so  doing  he  aided  in  building  up  in 
the  colonies  such  trades  as  the  making  up  of  clothes,  in  which 
his  brother  and  other  men,  physically  too  weak  to  be  diggers, 
could  gain  an  honest  living.  .  .  The  Australian  diggers  and 
western  farmers  of  America  are  setting  a  grand  example  to  the 
world  of  self-sacrifice  for  a  national  object"  (Dilke). 

"  Australia  is  but  a  young  country  yet,  with  plenty  of  avail- 
able land  for  settlement;  with  exuberance  of  resources,  mineral 
and  agricultural;  and  hitherto  not  greatly  overburdened  with 
population ;  and  that,  too,  of  a  class  consisting  probably  of  a 
smaller  number  of  the  physically  incapable  than  any  other  coun- 
try in  the  world.  Yet  for  years  past  the  great  difl&culty  has  been 
to  find  employment  for  the  rising  generation.  The  question  o^ 
tariffs  there  has  been  eminently  a  social  one"  (Syme).  It  is  a 
fact  known  to  the  present  writer  that  immigration  thither  from 
the  North  of  Ireland  was  deterred  by  the  reports  which  came 
back  that  fathers  of  families  in  very  comfortable  circumstances  had 
sent  their  sons  to  sea  in  despair  of  finding  work  for  them.  The 
Australians  found  that  "  their  youth  was  growing  up  in  a 
state  of  semi-barbarism,  without  education,  without  employment, 
and  without  hopes  for  the  future/'  while  their  country  was  be- 
coming "  a  huge  sheep-walk." 

§  274.    Those  who  are  familiar  with  the  facts  of  the  com- 


296  ELEMENTS    OF   POLITICAL    ECONOMY. 

mercial  history  of  Australia  are  not  so  ready  to  admit  that  her 
people  are  making  their  own  goods  at  a  loss.  (1)  The  Austra- 
lians are  much  less  at  the  mercy  of  speculators  than  when  they 
depended  entirely  upon  a  distant  market,  and  by  consequence 
they  are  now  in  so  far  free  from  the  vast  fluctuation  in  prices 
produced  by  '^ forestalling  the  market"  or  "  getting  up  corners/' 
"  There  is  scarcely  a  commodity  imported  into  Australia  but  has 
at  one  time  or  another  been  manipulated  in  this  fashion.  The 
practice  is  carried  on  in  the  most  systematic  manner.  There  are 
individuals  there  who  make  it  their  special  study  to  create  an 
artificial  scarcity.  No  sooner  is  there  the  slightest  prospect  of 
even  the  most  temporary  deficiency  in  the  supply  of  any  com- 
modity, than  some  one  immediately  begins  to  buy  up  every 
parcel  in  the  market  and  every  shipment  to  arrive.  Once  in  pos- 
session of  the  bulk  of  available  stock,  he  is  in  a  position  to  de- 
mand his  own  price  from  the  consumers"  (Syme). 

Hittell's  Resources  of  California  (p.  333),  gives  an  account  of  the  same 
system  as  pursued  on  the  Pacific  coast. 

(2)  Australia,  like  other  countries  that  did  not  manufacture, 
■was  not  ordinarily  furnished  with  goods  at  the  lowest  price  that 
her  British  friends  could  sell  them  for,  but  whenever  she  tried 
to  begin  their  manufacture  she  got  them  "  at, a  sacrifice."  She 
had  tallow  in  abundance  and  all  the  materials  to  make  soap  and 
candles;  her  people  repeatedly  undertook  to  make  them,  and  it 
was  found  that  they  could  do  so  at  prices  much  below  the  ordi- 
nary price  of  the  imported  articles.  But  no  sooner  was  this 
known  in  England,  than  large  shipments  of  soap  and  candles 
were  thrown  upon  the  market  at  prices  with  which  the  home 
manufacturer  could  not  compete.  One  maker  after  another  was 
crushed  by  the  unequal  competition,  until  the  Victoria  tariff"  of 
1871  took  this  industry  under  protection. 

Again,  Australia  produces  maize,  while  England  has  to  im- 
port it.  Yet  maizena,  a  well-known  preparation  from  that 
grain,  was  imported  from  England  and  sold  for  a  .shilling  a 
pound.  A  native  firm  began  its  manufacture  and  sold  it  at  five 
pence,  and  afterwards  at  two  pence  per  pound,  but  has  had  a 


IRELAND'S   PASSIVITY.  297 

hard  fight  with  foreign  competition,  and  would  have  been 
swamped  but  for  the  confidence  in  success  that  buoyed  thi  ni  up 
against  losses. 

Again,  Victoria  produces  vast  quantities  of  very  superior 
wool,  yet  in  1870  the  importation  of  woollens  amounted  to 
£817,087.  A  factory  at  Geelong  earned  a  fair  dividend  and  a 
high  reputation  by  the  manufacture  of  a  class  of  tweeds,  which 
wore  well.  A  Yorkshire  firm  got  a  sample  of  the  fabric  and 
made  a  cheap  and  inferior  imitation  of  it,  with  which  the 
colony  was  soon  flooded.  The  factory  would  have  been  closed 
had  not  the  legislature  imposed  a  protective  duty  upon  all  im- 
ported cloths,  and  the  colony  is  now  spinning  and  weaving  its 
own  wools  at  a  rate  that  will  soon  make  it  independent  of 
Yorkshire. 

These  are  not  the  only  cases.  An  old  colonist  declared  at  a 
public  meeting  in  Sydney,  that  he  "  had  seen  a  large  number  of 
industries  perish  in  this  country,  not  because  they  had  not  in- 
herent strength,  but  because  they  had  been  strangled,  as  it  were, 
by  the  competition  of  other  countries.  .  .  .  Unless  a  man  had 
a  very  strong  back,  he  could  not  bear  up  against  them  till  he 
could  establish  his  industry." 

See  Sir  Charles  Dilke's  Greater  Britain,  but  especially  "  Restrictions  on 
Trade:  From  a  Colonial  Point  of  Ftew,"  by  David  Syme.  Kepublishod 
Boston,  1873. 

§  275.  Two  of  England's  dependencies — Ireland  and  India — 
have  had  no  discretion  as  to  the  direction  of  their  economic 
policy, — no  power  to  set  up  barriers  against  the  beneficencics  of 
free  trade.  Both  of  them  have  been,  throughout  the  period  of 
their  relation  to  her,  relatively  inferior  in  capital  and  skill,  and 
both  have  illustrated  the  result  of  free  competition  between 
nations  so  situated. 

Ireland  possesses  many  natural  advantages,  but  labors  under 
the  absence  of  others.  Acre  for  acre  her  soil  is  better  than  that 
of  England,  but  her  immense  rainfall — in  some  places  in  the 
west  it  rains  two  hundred  days  in  the  year — renders  grain-farm- 
ing gambling.     Since  the  failure  of  the  potato  crop,  she  has  been 


298  ELEMENTS   OF    POLITICAL    ECONOMY. 

chiefly  dependent  upon  green  crops  and  dairy  farming,  and  sho 
is  unsurpassed  in  both.  She  has  mines  of  gold,  silver,  and  iron, 
but  very  few  of  coal ;  a  great  geological  convulsion  seems  to  have 
stripped  her  of  her  coal  measures,  paring  the  top  from  the 
island  and  leaving  bare  the  vast  limestone  plain,  intersected  with 
peat  bogs,  which  forms  its  centre.  But  English  coal  can  be 
put  down  on  her  seaboard  as  cheaply  as  in  the  sotith  of  Eng- 
land ;  more  cheaply  than  in  France.  Her  vast  area  of  fine  pas- 
ture land  and  her  peculiar  climate,  render  the  wool  of  her  sheep 
exceptionally  fine,  and  therefore  for  centuries  back  in  great  de- 
mand to  mix  with  the  coarse  wools  on  the  Continent.  But  her 
wool  is  not  woven  and  spun  at  home ;  she  exports  it  together  with 
large  quantities  of  food.  Her  Celtic  people  are  of  the  same  blood 
with  the  French  across  the  Channel,  and  possess  the  same  capa- 
city for  the  development  of  fine  taste,  and  the  artistic  feeling  for 
form  and  color ;  but  these  lie  undeveloped  while  they  remain  at 
home.  The  Irishman  only  flourishes  after  being  transplanted 
from  his  native  soil,  although  he  feels  for  that  soil  the  most  pas- 
sionate attachment.  His  qualities  as  a  workman,  which  have 
been  so  abundantly  useful  in  our  country,  lie  dormant  at  home. 
§  278.  The  spirit  in  which  the  English  governn)ent  and 
people  used  to  deal  with  Irish  industry  finds  its  most  strikintj: 
illustration  in  the  suppression  of  the  woollen  manufacture  at  the 
close  of  the  seventeenth  century.  The  manufacture  of  woollc!  s 
and  linens  began  very  early ;  under  Henry  VIII.  the  importa- 
tion of  Irish  woollen  thread  was  prohibited.  Under  Charles  I. 
Wentworth  used  all  his  tyrannical  energies  to  suppress  the 
woollen  manufacture,  and  promote  that  of  linen.  The  over- 
throw of  the  King  and  his  party  left  the  Irish  free  to  spin  and 
weave  what  they  would,  and  not  till  after  the  Revolution  of 
1688  did  the  complaints  of  the  English  manufacturers  induce 
the  government  to  restrict  them  from  producing  woollens  for  the 
supply  of  the  home  market.  The  English  House  of  Lords 
(1698)  took  the  initiative,  and  begged  the  King  to  take  measures 
to  confine  the  Irish  to  the  linen  trade,  as  the  rapid  growth  of 
their  woollen  trade  was  drawing  English  spinners  and  weavers 


IRISH   WOOLLEN   INDUSTRY   STRANGLED.  299 

to  Ireland.  The  House  of  Commons  followed,  and  the  King 
promised  to  do  what  was  desired.  The  Irish  Parliament  was  in 
no  sense  a  body  that  represented  the  nation ;  they  imposed  a 
prohibitory  duty  on  the  export  of  Irish  woollens,  while  the 
English  Parliament  prohibited  their  export  save  from  six 
Irish  to  six  English  ports.  Irish  industry  received  a  shock 
from  which  it  never  recovered,  and  even  English  industry  felt 
the  recoil.  The  wool-workers  flocked  over  into  England,  and 
overstocked  the  labor  market,  or  by  competing  for  the  trade, 
cut  down  the  profits.  Others  took  their  skill  and  industry  to 
the  Continent,  and  contributed  to  the  improvement  of  the 
foreign  factories.  A  great  part  of  the  people  were  thrown  out 
of  employment,  or  thrown  back  upon  farming,  and  the  era  of 
rack-rents  began.  "  Upon  the  determination  of  all  leases  made 
before  1690,"  says  Dean  Swift,  *'  a  gentleman  thinks  he  has  but 
indifferently  improved  his  estate  if  he  has  only  doubled  his 
rent  roll.  Farms  are  screwed  up  to  a  rack-rent — leases  granted 
but  for  a  term  of  years — tenants  tied  down  to  hard  conditions, 
and  discouraged  from  cultivating  the  land  they  occupy  to  the 
best  advantage  by  the  certainty  they  have  of  the  rent  being 
raised,  on  the  expiration  of  their  lease,  proportionably  to  the 
improvements  they  shall  make.''  The  value  of  Ireland  as  a 
customer  for  English  goods  was  very  greatly  diminished ;  where 
once  they  had  bought  large  quantities  of  the  better  wares,  they 
now  took  only  the  coarser,  and  in  small  amounts.  Well  might 
Swift,  with  savage  wit,  refuse  to  respond  to  the  toast,  "  Ireland's 
Prosperity,"  on  the  ground  that  he  "  never  drank  to  memories." 
"  Ireland,"  he  wrote  in  1727,  *'  is  the  only  kingdom  I  ever  heard 
or  read  of,  either  in  ancient  or  modern  story,  which  was  denied  the 
liberty  of  exporting  their  native  commodities  and  manufactures 
wherever  they  pleased,  except  to  countries  at  war  with  their 
own  prince  or  state ;  yet  this  privilege,  by  the  superiority  of 
mere  power,  is  denied  us  in  the  most  momentous  parts  of  com- 
merce." With  every  generation  her  trade  declined,  except  that 
in  linen,  conducted  chiefly  by  the  Scotch  and  English  colonists 
in  the  three  north-eastern  coufl||01^5(i^efe^nfe^|Kgams  are  so 

UNIVERSITTl 


300  ELEMENTS   OF   POLITICAL   ECONOMY. 

richly  charged  with  natural  salts  that  they  will  bleach  without 
the  addition  of  chemicals.  Even  this  was  envied;  in  1785 
Manchester  sent  up  a  petition  with  117,000  signatures,  asking 
the  prohibition  of  Irish  linens.  The  implied  pledge  made  to 
foster  the  Irish  linen  trade  was  never  kept ;  bounties  were  given 
to  English  and  Scotch  producers  only.  But  the  Irish  maker 
held  his  own,  and  the  annual  value  of  Irish  linen  is  now  half 
that  of  the  rental  of  the  kingdom. 

§  277.  This  act  was  but  the  worst  of  many  conceived  in  the 
same  spirit.  The  export  of  cattle  to  England  in  1663  was  pro- 
hibited in  order  to  protect  the  English  breeder.  The  manufac- 
ture of  glass  was  put  down  in  the  same  way  as  that  of  woollens. 
"  The  easiness  of  the  Irish  labor  market  and  the  cheapness  of 
provisions  still  giving  us  the  advantage,  even  though  we  had  to 
import  our  materials,  we  next  made  a  dash  at  the  silk  business, 
but  the  silk  manufacturer  proved  as  pitiless  as  the  woolstapler. 
The  cotton  manufacturer,  the  sugar  refiner,  the  soap  and  candle 
maker  (who  especially  dreaded  the  abundance  of  our  kelp),  and 
any  other  trade  or  interest  that  thought  it  worth  its  while  to  pe- 
tition was  received  by  Parliament  with  the  same  cordiality,  until 
the  most  searching  scrutiny  failed  to  detect  a  single  vent  for  the 
hated  industry  of  Ireland  to  respire'^  (Lord  DufFerin).  The 
country  was  forbidden  to  trade  with  the  East,  with  the  Mediter- 
ranean, with  the  Colonies. 

Not  till  the  rising  of  the  Irish  Volunteers  in  1778,  and  the 
consequent  concession  of  the  independence  of  the  Irish  Parlia- 
ment in  1783,  was  the  weaker  island  treated  as  possessed  of  any 
industrial  rights  that  the  stronger  was  bound  to  respect.  From 
that  period  till  the  Union  of  1801,  Ireland  had  control  of  her 
own  industrial  policy,  and  one  of  the  first  uses  that  she  made  of 
it  was  to  impose  a  duty  upon  the  importation  of  certain  English 
goods  which  it  was  felt  could  be  made  as  well  at  home.  Those 
eighteen  years  were  a  time  of  rapid  industrial  growth ;  Irish 
manufactures  began  to  show  themselves,  "  There  is  not  a 
nation  on  the  habitable  globe,"  wrote  Lord  Clare  in  1798, 
*•  which  has  advanced  in  cultivation  and  commerce,  in  agricul- 


THE  INFAMOUS   UNION.  301 

ture  and  manufactureSj  with  the  same  rapidity  in  the  same 
period."  But  one  of  the  provisions  of  the  infamous  compact 
which  terminated  the  country's  legislative  independence,  was 
the  gradual  removal  of  these  duties.  Those  on  cotton  goods 
were  to  be  removed  between  1808  and  1821 ;  those  on  woollens 
by  the  latter  datej  that  on  cotton  yarn  in  1810.  As  the  pro- 
cess went  on,  the  Irish  factories  closed  with  the  same  beautiful 
regularity.  The  protected  silk,  flannel,  stocking,  blanket  and 
calico  manufactures  of  Ireland  are  now  extinct.  By  1840  the 
woollen  manufacturers  of  Dublin  had  fallen  off  from  ninety-one 
to  twelve ;  their  workmen  from  nearly  5000  to  about  600  ;  wool- 
combing  and  carpet-weaving  was  almost  gone.  Six  thousand 
weavers  and  combers  in  Cork  were  reduced  to  478  by  1834. 

Once  again  the  people  were  thrown  back  upon  the  land;  the 
merciless  competition  of  British  capital  was  as  effective  as  the 
merciless  legislation  of  the  English  Parliament ;  English  Free 
Trade  undersold  Irish  manufactures  out  of  existence,  and 
reduced  the  Irish  people  to  the  uniformity  of  a  single  employ- 
ment. The  only  field  of  enterprise  left  was  competition  for  the 
possession  of  a  few  acres,  as  the  last  refuge  from  starvation. 
"  Some  well-meant  but  vain  attempts  have  been  made  from  time 
to  time  to  promote  manufactures  in  the  country,  in  the  form  of 
what  is  called  an  Irish  manufacture  movement,  that  is,  an  agita- 
tion to  induce  a  general  undertaking  or  resolution  to  use  articles 
of  Irish  manufacture  rather  than  English,  without  reference  to 
their  relative  quality  or  cheapness"  (J.  N.  Murphy).  But  in 
vain  ;  because  the  people  had  no  power  to  "  give  effect  to  their 
judgment  respecting  their  own  interests,"  all  attempts  at  such 
concert  being  ineffectual,  "  unless  it  receives  the  sanction  and 
validity  of  a  law"  (Mill).  *'  It  is  well  known  that  almost  all 
the  manufactured  articles  used  in  Ireland,  save  linen,  are 
British  or  foreign  products.  There  are  British  and  French 
millinery  and  silks;  British,  French,  Danish  and  Hungarian 
gloves;  English  soap,  candles,  ironmongery,  hardware  and 
glass;  in  fact,  almost  everything  in  use  by  rich  and  poor — all 
imported   and   paid    for   by   Irish   raw   agricultural   product'' 


302  ELEMENTS    OF    POLITICAL   ECONOMY. 

(Murphy).  England  has  740  occupations  relating  to  trade,  com- 
merce and  manufacture;  little  Scotland  501;  Ireland  only  261. 

§  278.  "  Some  human  agency  must  be  accountable,"  says 
Lord  Dufferin,  "  for  the  perennial  desolation  of  a  lovely  and 
fertile  island,  watered  by  the  fairest  streams,  caressed  by  a  clem- 
ent atmosphere,  held  in  the  embraces  of  a  sea  whose  affluence 
fills  the  noblest  harbors  of  the  world,  and  inhabited  by  a  race — 
valiant,  generous,  tender — gifted  beyond  measure  with  the 
power  of  physical  endurance,  and  graced  with  the  liveliest  intel- 
ligence." 

Many  are  the  solutions  !  1.  "The  Irish  are  an  idle,  thriftless 
race,"  says  prejudice.  Their  record  in  the  colonies  and  in 
America,  as  in  England  itself,  disproves  the  slander.  "  We 
are  apt  to  charge  the  Irish  with  laziness,"  says  Swift,  "  because 
we  seldom  find  them  employed ;  but  then  we  don't  consider 
that  they  have  nothing  to  do."  -'They  are  priest-ridden,  ig- 
norant Catholics,"  says  bigotry.  They  bring  their  religion  with 
them  to  new  fields  of  labor,  but  it  does  not  prevent  their  pros- 
pering. They  are  of  the  same  creed  as  the  industrious  and 
prosperous  Belgians ;  of  the  same  race  and  creed  as  the  French. 
"  They  are  turbulent;  the  country  is  so  disturbed  by  popular  out- 
rages, that  capital  shrinks  from  Ireland  as  a  field  of  investment," 
say  the  lovers  of  peace  and  quiet.  It  is  admitted  that  Ireland 
is  disturbed  because  of  the  poverty  and  misery  of  the  people. 
It  is  a  miserable  circle,  if  the  efi"ects  of  their  misery  are  such  as 
to  prevent  the  application  of  the  remedy.  Is  not  the  efl'ect  put 
for  the  cause  here  ? 

2.  "  The  misery  of  Ireland  arises  from  the  excess  of  her 
population,"  say  the  old-fashioned  economists.  Between  the 
Union  and  the  Famine  (§  66)  the  rate  of  increase  of  popula- 
tion in  Ireland  was  less  than  in  England  ;  since  that  date  there 
has  been  a  decrease  of  one-third  through  emigration,  without 
any  corresponding  improvement  in  the  condition  of  the  people. 
Although  England  consumes  over  fifty  million  bushels  of  grain 
in  the  manufacture  of  liquor,  she  manages  to  feed,  in  ordinary 
years,  two  thirds  of  her  population  or  fourteen  and  a  half  mil- 


WHY   IS   IRELAND   POOR?  303 

lion  people — taking  the  census  of  1868 — on  the  produce  of 
twenty-five  and  a  half  million  acres  of  arable  land.  Belgium 
on  six  and  a  half  million  acres  feeds  nearly  five  million  people. 
Ireland  with  fifteen  and  a  half  million  acres  of  better  land  than 
cither  England  or  Belgium  can  show,  is  overpopulated  with  a 
people  that  number  something  over  five  and  a  half  million 
Bouls!  "  But  since  the  famine  and  emigration  brought  down 
the  numbers,  things  are  much  better  in  Ireland.  Mr.  Disraeli, 
you  know,  says  that  the  '  famine  did  more  for  Ireland  than  a 
long  succession  of  statesmen  had  been  able  to  do.'  "  The  fam- 
ine and  emigration  did  reduce  the  population  from  something 
like  eight  millions  to  the  present  figures,  a  decline  of  32  per 
cent.  But  the  best  judges  pronounce  that  this  reduction  has 
effected  no  material  improvement  in  the  condition  of  the  peo- 
ple, which  is  improving  only  where  the  farmerand  the  artisan  are 
in  neighborhood,  and  whore  the  farmer  sells  his  crop  to  his 
neighbors,  i.  e.,  in  the  three  or  four  north-eastern  counties.  Every- 
where else,  the  Irishman  at  home  is  ^'  selling  the  hide  for  six- 
pence and  buying  back  the  tail  for  a  shilling."  "  The  dispropor- 
tion of  the  opportunities  of  employment  to  population,"  as  Lord 
Dufferin  expresses  it,  is  the  real  state  of  the  case;  not  the  dis- 
proportion of  natural  resources  and  land  to  the  population. 
But  this  explanation  confesses  judgment  against  those  who  have 
control  of  the  industries  of  Ireland.  For  the  rapid  and  enor- 
mous multiplication  of  any  people,  if  it  outrun  the  development 
of  their  industrial  resources,  is  a  proof  and  a  consequence  of  the 
wretchedness  and  poverty  that  first  made  them  reckless  and 
hopeless.  It  is  the  well-to-do  workman,  the  one  who  has  a 
social  standing  and  prospects,  that  considers  his  ways. 

See  g  68,  note.  The  only  evidence  we  can  find  for  the  assertion  of  a  rapid 
increase  in  the  population  is  the  fact  that  the  Registrar-General  reported 
an  enormous  birth  rate  in  Ireland.  But  the  official  figures  of  the  Irish 
census  show  that  this  must  have  been  balanced  by  a  still  more 
enormous  death-rate,  as  indeed  is  highly  probable  (§  71).  Yet  Mr. 
Mill  gives  from  Quetelet  a  table  of  annual  increase  nhirfa  puts  the 
Irish  rate  far  higher  than  that  of  England,  and  indeed  tb-  Xl^  i»»i  Id 
Europe. 


304  ELEMENTS   OF   POLITICAL    ECONOMY. 

§  279.  3.  "  The  misery  of  Ireland  arises  out  of  the  wretched 
system  of  land  tenure,"  say  the  new-fashioned  economists, 
Mr.  Thornton  and  his  disciples;  "her  people  are  reduced  to 
tenants  at  will,  they  are  rack-rented ;  they  have  no  inducement 
to  improve  their  land,  because  the  better  they  make  it,  the 
higher  the  rents  will  go.  They  hide  their  savings  from  the 
landlords,  and  get  two  per  cent,  interest  on  them,  instead  of 
putting  them  into  the  land.  They  need  security  of  tenure  and 
compensation  for  unexhausted  improvement.  Till  they  get  them, 
as  Mr.  Caird  says,  '  what  the  ground  will  yield  from  year  to  year, 
at  the  least  cost  of  time,  labor  and  money,  is  taken  from  it.'  " 
The  inference  is  that  the  Irish  landlords,  and  the  middlemen  to 
whom  they  let  their  properties,  and  who  again  sublet  it  to  the 
farmers,  have  been  the  vampires  who  have  destroyed  Irish 
prosperity,  and  driven  her  people  beyond  the  seas.  But  where 
the  same  land  tenure  has  coexisted  with  manufactures  the 
people  have  prospered;  and  where  the  two  have  not  been  asso- 
ciated, the  landlord  has  often  been  broken  in  fortune  as  well  as 
the  tenant.  The  commissioners  sent  out  to  relieve  the  sufferers 
by  the  famine,  found  in  the  Connaught  poor-houses  men  of 
estate  and  family,  w4io  had  served  as  the  High  Sheriffs  of 
their  counties.  Oae-third  the  landlords  of  Ireland  were  swept 
away  in  the  common  ruin.  A  very  large  portion  of  the  land 
of  Ireland  has  changed  hands  in  late  years ;  £25,000,000 
worth  in  the  ten  years  (1849-1859),  during  which  the  P^neum- 
bered  Estates'  Court  sat  in  Dublin.  Of  the  estates  thus  sold, 
the  ownership  was  often  only  nominal ;  the  landlord  an  unpaid 
pensioner  on  his  own  land.  And  it  is  a  mistake  to  suppose 
that  rack-rents  are  necessarily  high,  except  in  relation  to  the 
means  :>f  the  tenant.  "  The  rents  of  Ireland  are  comparatively 
low.  This,  I  believe,  is  generally  admitted,  though  there  are 
flagrant  exceptions ;  even  a  rent  that  is  absolutely  low,  may  be 
beyond  the  means  of  an  indigent  or  unskilful  tenant"  (Lord 
Dufferin.)  They  are  in  fact  much  lower  than  farmers  with  the 
command  of  a  home  market  easily  pay  in  other  countries;  much 
higher  than  the  Irish  farmer  can  often  afford. 


THE    IRISH    LAND-MARKET.  305 

\fter  all,  what  is  tho  charge  brought  against  the  Irish  land- 
1(  /"is  and  their  middlemen  ?  That  they  acted  on  the  princi- 
ples of  English  Political  Economy,  and  sold  their  commodity 
in  the  dearest  market  they  could  find.  "  The  moral  respon- 
sibility of  accepting  a  competition  rent  is  pretty  much  the  same 
as  that  of  profiting  by  the  market  rate  of  wages.  If  the  first 
is  frequently  exorbitant,  the  latter  is  as  often  inadequate,  and 
inadequate  wages  are  as  fatal  to  efficiency  as  a  rack-rent  is 
to  production  j  though  each  be  the  result  of  voluntary  adjustment, 
it  is  the  same  abject  misery  and  absence  of  an  alternative  which 
rule  the  rate  of  both.  .  .  .  The  disproportion  of  the  op- 
portunities of  employment  to  population  has  resulted  in  univer- 
sal pressure  and  universal  competition — competition  in  the  labor 
market ;  .  .  .  .  competition  in  the  land  market  only  to  be 
relieved  by  the  application  to  more  profitable  occupations  of  so 
much  of  the  productive  energies  of  the  nation   as  may  be  in 

excess  of  the  requirements  of  a  perfect  agriculture 

How  powerfully  the  development  of  manufactures  in  the  North 
of  Ireland  has  contributed  to  the  relief  of  the  agricultural 
classes  of  Ulster,  by  giving  the  tenant  farmer  an  opportunity  of 
apprenticing  some  of  his  sons  to  business,  ....  and  by 
enabling  the  cottier  tenant  to  supplement  his  agricultural  earn- 
ings with   hand-loom  weaving,  and   by  a  general  alleviation   of 

the  pressure  upon  the   land,  I  need   not  describe 

Had  Ireland  only  been  allowed  to  develop  the  other  innumera- 
ble resources  at  her  command,  as  she  has  developed  the  single 
industry  in  which  she  was  permitted  to  embark,  the  equilibrium 
between  the  land  and  the  population  dependent  upon  the  land 
would  never  have  been  disturbed,  nor  would  the  relations  be- 
tween landlord  and  tenant  have  become  a  subject  of  anxiety  " 
(Lord  Dufferin).  But  the  Irish  land  laws  of  1870  and  1881 
both  seek  to  put  a  limit  to  the  competition  for  land  by  legal 
restriction,  rather  than  to  put  an  end  to  it  by  removing  its 
cause — ^by  creating  and  cherishing  a  varied  industry.  They 
did  so  with  eyes  fully  open  to  the  source  of  this  unhappy  com 

petition.     In  the  debate  on  the  former  Bill  in  the  Commons 
20 


306  ELEMENTS   OF   POLITICAL    ECONOMY. 

the  line  of  argument  adopted  by  the  Government,  according  t^ 
Tlie  Spectator^  was  this  :  "  Free  contract  implies  free  contract- 
ors ;  however,  partly  from  historical  circumstances  but  chiejiy 
from  the  absence  of  alternative  employments^  the  poorer  tenants 
of  Ireland  are  not  free ;  at  least  half  the  adult  population  are 
compelled  by  the  coercion  of  hunger  to.  agree  to  any  terms 
which  will  secure  them  the  use  of  the  soil.  It  is  because  they 
are  not  free  that  a  penalty  is  afl&xed  to  capricious  eviction, — 
that  a  court  is  to  settle  the  terms  on  which  leases  must  be 
granted,  that  even  on  the  expiring  of  the  lease,  good-will  is  to 
revive  like  a  plant  out  of  the  ground."  On  reading  this,  we 
are  obliged  to  ask  :  Are  there  no  resources  at  the  command  of 
statesmanship,  by  which  these  "  alternative  employments " 
could  be  called  into  existence,  and  the  Irish  problem 
solved  without  tampering  with  vested  rights,  and  re- 
calling into  existence  that "  system  of  limited,  imperfect  and 
half-developed  rights^  natural  only  to  a  low  civilization,"  which 
all  Europe  has  taken  such  trouble  to  be  rid  of  There  is  a  re- 
source which  has  always  been  found  fully  equal  to  the  occasion, 
but  unfortunately  it  is  called  Protection.  And  from  the  most 
trusted  leaders  that  the  people  of  Catholic  Ireland  ever  had,  a 
demand  for  it  has  been  distinctly  made. 

"  What  sort  of  legislation  would  follow  the  establishment  of  a  separate 
Irish  Parliament,  if  any  legislation  at  all,  might  easily  be  anticipated, 
if  it  were  not  distinctly  foreshadowed  in  a  tentative  declaration  of  some 
Catholic  clergymen,  drawn  with  great  ability  for  its  purpose,  and  assur- 
edly not  put  forward  without  the  private  sanction  of  higher  authority 
than  it  claims.  It  is  enough  to  say  it  is  declared  that  Political  Economy 
will  not  do  for  Ireland,  that  the  Irish  manufacturer  cannot  compete  with 
the  English,  and  that  the  natural  energies  of  the  Irish  people  must  be 
developed — that  is  to  say,  properly  speaking,  repressed — by  Protection 
and  prohibition" — (Cliffe  Leslie  {Land  Systems  of  Ireland,  England  and 
the  Continent,  pp.  35-6.)  Mr.  Leslie  recognises  the  fact  that  the  absence 
of  manufactures  is  a  chief  source  of  Irish  poverty  and  retrogression. 
However,  he  believes  that  Ireland  is  not  a  manufacturing  country,  be- 
cause her  land  tenure  laws  are  so  bad  that  the  capitalist  cannot  secure 
sites  for  factories,  and  he  seeks  to  substantiate  this  reasoning  by  adducing 
Bome  half-dozen  cases  of  hardship.  The  land  tenure  is  the  same  in 
England  as  in  Ireland ;  the   same  in  Ulster  as  in   Connaught.     It  was 


Ireland's  "lack  of  capital."  307 

the  same  In  17S;5-1801  as  it  is  now,  when  nc  juch  ilifliculty  as  to  the 
sites  of  factories  was  experienced. 

Did  not  the  Gladstone  ministry  and  their  majority  in  Parliament  "  declare 
that  Political  Economy  would  not  do  for  Ireland,"  when  they  resolved  to 
sot  aside  freedom  of  contract  between  landlord  and  tenant?  "If  Eng- 
lish landlords,  millionaires  and  economists  have  an  economical  convic- 
tion, it  is  in  favor  of  freedom  of  contract.  Yet  a  house  led  by  the 
greatest  of  living  economists  has  abandoned  it.  .  .  .  The  Bill  does  iotor- 

fere  directly  with   their  claim  to   do  as  they  like  with  their  own 

Mr.  Lowe,  when  taunted  with  his  old  economical  arguments,  acknow- 
ledged that  the  Bill  was  not  intended  to  increase  wealth,  which  is  the  ob- 
ject of  Political  Economy,  but  to  save  society"  (Spectator). 

§  280.  (4)  "  Ireland  is  miserable,  wretched,  iinprogressive 
for  lack  of  capital  to  undertake  the  industries  that  would  give 
her  people  sufficient  employment,"  says  the  practical  man. 
Solomon  anticipated  him  when  he  wrote,  "  The  destruction  of 
the  poor  is  their  poverty;"  but  of  what  use  is  it  to  tell  the  Irish 
people  that  the  reason  why  they  are  so  ill  oflF  is  because  they  were 
not  in  the  past  able  to  lay  by  for  the  present,  and  therefore  will 
not  now  be  able  to  do  so  for  the  future  ?  "  We  frequently  hear 
Irish  aspirations  after  English  capital ;  and  loud  are  the  popular 
rejoicings  when  an  Englishman  settles  in  Ireland,  with  a  few 
thousand  pounds,  to  establish  some  branch  of  industry;  and 
these  rejoicings  are  not  so  much  for  the  example  he  sets,  as  for 
the  capital  he  brings  with  him.  We  find,  too,  the  English  press 
occasionally  warning  the  people  of  Ireland  not  to  frighten  away 
by  their  turbulence  English  capital,  which,  if  not  so  deterred, 
would  be  devoted  to  the  development  of  Ireland,  instead  of  be- 
ing seat  for  employment  to  the  antipodes, — a  warning  which  im- 
plies that  Ireland  must  look  outside  herself  for  the  capital  neces- 
sary to  develop  her  resources,  .  .  .  Capital  may  be  defined  as 
past  labor  laid  by  to  aid  future.  .  .  .  The  capital  of  Great  Bri- 
tain and  other  civilized  nations  has  grown  from  weak  and  scanty 
beginnings.  .  .  .  The  capital,  or  saved  labor  of  any  country, 
must  in  the  aggregate  come  from  the  labor  of  that  country.  It 
cannot  come  from  any  other  source.  Another  country  will  not 
supply  it.  Capital  is  not  parted  with  unless  in  exchange  for  aa 
equivalent.     The   more  the  labor  of  a  country  is  productively 


308  ELEMENTS    OF    POLITICAL    ECONOMY. 

employed,  fhe  larger  will  be  the  amount  of  its  savei  labor.  The 
greater  the  activity  of  industry,  the  energy  of  production,  the 
process  of  perpetual  consumption  and  reproduction,  the  greater 
will  be  the  capital  created  within  the  country"  (J.  N.  Murphy). 
But  even  savings  are  not  capital  unless  they  are  reproductively 
employed  in  the  country  itself;  and  the  productive  classes  of 
]  reland  save  large  suras  of  money,  for  whose  investment  there  is 
absolutely  no  opening  in  Ireland.  An  average  of  £16,000,000 
is  deposited  with  the  Irish  banks  at  14  per  cent,  interest,  and 
is  invested  in  the  Loudon  money  market  by  the  bankers.  And 
the  amount  of  these  savings  would  be  very  much  greater,  were  it 
not  for  the  vast  number  of  the  unemployed  and  unproductive 
class  who  live  off  the  national  income.  These  are  the  two  ex- 
tremes of  Irish  society, — the  landlords  who  draw  incomes  from 
Irish  estates  and  spend  them  in  Paris  or  Naples,  instead  of  de- 
voting themselves,  as  captains  of  industry,  to  the  development 
and  improvement  of  their  estates  3  the  great  host  of  beggars, 
paupers  and  dependent  persons,  who  find  nothing  to  do,  and 
live  in  idleness  off  the  earnings  of  others,  some  of  them  inside, 
but  most  of  them  outside  the  workhouse. 

Even  Lord  Dufferin  joins  in  this  talk  about  Ireland's  need  of  capital : — 
"  Let  capital  overflow  her  soil,  and  though  her  superficial  area  remain  the 
same,  the  stimulus  to  her  powers  of  production  would  be  equivalent  to  an 
accession  of  territory  sufRcient  to  support  thousands  in  affluence,  where 
at  present  hundreds  find  a  difficulty  in  extracting  a  bare  subsistence." 
Ireland  has,  and  under  any  free  trade  regime  would  have,  to  compete 
with  the  industrial  skill  and  the  division  of  labor  which  has  been  the 
slow  acquisition  of  centuries  of  English  history.  Irish  labor  is  dear,  as 
all  unskilled  labor  is.  As  her  people  say,  "  their  fingers  are  all  thumbs  " 
at  manufacturing,  and  Lord  Dufferin  himself  tells  us  that  "even  the  tra- 
ditions of  commercial  enterprise  have  perished  through  desuetude."  The 
nascent  industries  of  Ireland  would  be  "strangled  in  their  cradle," 
unless  the  new  capitalists  had — as  the  Australian  expressed  it — "a  pretty 
strong  back  "  to  bear  up  against  the  sort  of  competition  that  Manchester 
and  Bradford,  Sheffield  and  Birmingham  would  bring  to  bear  upon  them. 

§  281.  What  will  England  do  for  Ireland  ?  Almost  anything 
except  protect  her  industry  or  repeal  the  Union  and  concede  the 
"Home  Rule"  that  would  enable  her  to  protect  herself.  Every- 
thing, that  is,  but  the  one  thing  that  will  be  of  permanent  use. 


JUDGE   BYLES   ON   RESTITUTION.  30S 

?lic  will  even  interfere  with  the  rights  of  property,  and  put  the 
coni})otition  of  the  land  market  under  restraint.  ]5ut  she  will 
suffer  no  restraints  upon  the  market  for  cottons,  woollens,  hard- 
ware, soap,  candles  and  glass;  its  competitions  are  something 
unspeakably  sacred,  on  which  none  may  lay  irreverent  hands. 
And  then,  is  not  British  prosperity  bound  up  with  the  doctrine 
that  men  have  the  right  to  buy  in  the  cheapest  and  sell  in  the 
dearest  market,  and  do  what  they  will  with  their  own, — provided 
it  is  not  land  in  Ireland  ?  Only  one  English  voice  is  raised  in 
protest :  "  The  destruction  of  Irish  industry  by  the  ancient 
English  policy  is  not  only  a  case  for  repentance,  but  for  restitu- 
tion, or  at  least  compensation.  Like  other  sinners,  we  are  very 
willing  to  confess  that  we  have  done  wrong;  ready  even  to 
promise  that  we  will  do  so  no  more.  But  a  proposal  that  we 
should  give  any  Irish  industry,  or  even  any  English  industry  on 
Irish  ground,  a  partial  and  temporary  advantage,  so  as  to  place 
Ireland,  as  nearly  as  we  can,  in  the  same  state  as  if  she  had  al- 
ways been  fairly  treated,  as  an  integral  part  of  the  empire — a 
proposal  to  make  up  for  past  delinquencies  and  really  restore  in- 
dustry to  its  natural  channels — I  say  such  a  proposal,  just  and 
natural  as  it  is,  would  at  present  be  received  in  England  with 
derision."  ...  If  this  were  done  "  England^s  gain  in  the  re- 
sult cannot  be  calculated.  But  she  will  be  no  loser  even  in  the 
process.  The  wealth  that  native  manufactures  will  at  once  pour 
into  Ireland's  lap  will  not  be  ahstracted  from  the  United  King- 
dom,, but  created  in  Ireland  "  (Judge  Byles). 

See  Sophisms  of  Free  Trade  ;  Chap.  XVI. :  "  Free  Trade  for  Ireland." 
Also  Lord  Dufferin's  Irish  Emigration  and  the  Teimre  of  Land  in  Ireland g 
and  Mr.  J.  N.  Murphy's  Ireland — Industrial,  Political  and  Social, 

§  282.  India  was  a  manufacturing  country  when  English 
merchants  first  began  to  establish  their  factories  or  trading  sta- 
tions along  the  coast  of  the  Bay  of  Bengal.  Down  to  quite  a 
recent  period  a  great  trade  in  the  fine  cotton  goods  of  India — 
"so  fine  that  you  can  hardly  feel  them  with  your  hand" — was 
carried  on.  "  On  the  coast  of  Coromandel  and  in  the  Province 
of  Bengal,  when  at  some  distance  from  a  high-road  or  principal 


310  ELEMENTS    OF    POLITICAL    ECONOMY. 

town,  it  is  difficult  to  find  a  village  in  which  every  man,  w  3man 
and  child  is  not  employed  in  making  a  piece  of  cloth.  At  pres- 
ent much  the  greater  part  of  whole  provinces  are  employed  in 
this  single  manufacture/'  whose  process  "  includes  no  less  than 
a  description  of  the  lives  of  half  the  inhabitants  of  Indostan  " 
(Col.  Orme,  1805).  The  manufacture  was  very  ancient:  "  the 
weaver  of  Dacca  on  his  clumsy  loom  produced  in  the  days  of 
the  Roman  empire  that  '  woven  wind/  the  transparent  Indian 
muslin, — the  human  gossamer,  of  which  a  whole  dress  will  pass 
through  a  finger  ring.  Any  other  nation  than  our  own,  I  sup- 
pose, would  have  cherished  the  manufacture  of  a  fabric,  the 
most  perfect  probably  in  the  whole  world,  and  certainly  the 
most  ancient  that  can  be  specifically  identified  :  had  it  fallen 
naturally  into  disuse,  would  have  held  a  little  state  money  well 
spent  to  preserve  it.  Not  so  we  English.  We  have  well-nigh 
annihilated  the  cotton  manufacture  of  India.  Dacca  is  in  great 
measure  desolate ;  the  population,  from  300,000  has  fallen  to 
60  or  70,000 ;  its  most  delicate  muslins  are  almost  things  of  the 
past.  We  imposed  prohibitory  duties  on  the  'import  of  Indian 
manufactures  into  this  country.  We  imported  our  own  at  nomi- 
nal duties  into  India.  The  slave-grown  cotton  of  America, 
steam-woven  into  Manchester  cheap-and  nasties,  displaced  on 
their  native  soil  the  far  more  durable  but  more  costly  products 
of  the  Indian  loom.  .  .  .  " 

See  J.  M.  Ludlow's  British  India,  its  Races  and  its  History.  Two  vols. 
Cambridge,  1858.  Also,  his  Thoughts  on  the  Policy  of  the  Crown  toward 
India.     London,  1859;  and  Chapman's  Cotton  and  Ooniinercc  of  India. 

England  brought  India  juster  and  cheaper  government,  an 
era  of  peace,  lighter  taxes  and  improved  methods  of  manage- 
ment. But  under  the  Christian  rule  of  Britain  the  industry  of 
the  country  has  been  blighted,  and  ''  the  manufactures  of  India 
were,  it  may  be  said,  completely  ruined  by  a  general  lowering 
of  import  duties  [in  1813]  on  articles  the  produce  or  manu- 
facture of  Great  Britain,  without  any  reciprocal  advantages 
being  given  to  Indian  produce  or  manufactures  when  brought 
home.     Next,  inasmuch  as  the  sale  of  opium,- 


THE    IDLENESS   OF   INDIA.  311 

monopoly  in  Bengal  and  Beliar — was  greatly  impeded  by 
the  competition  of  free-grown  opium  from  the  native  states 
of  Malwa.  prohibitory  duties  were  imposed  at  all  the  Presiden- 
cies on"  the  latter,  "  and  the  native  princes  of  Malwa  were  ac- 
tually induced  to  prohibit  the  cultivation  of  the  poppy  for  British 
behoof, — being  suitably  bribed  for  thus  ruining  their  own  sub- 
jects "  (Ludlow).  By  1833  not  a  single  piece  of  cloth  was  ex- 
ported from  India,  and  for  the  ruin  inflicted  on  its  ar.isans  Lord 
William  Bentinck,  the  Governor-General,  could  find  "  no  paral- 
lel in  the  annals  of  commerce."  English  writers  tell  of  "  the 
enormous  and  undeniable  falling  off  in  the  commercial  activity 
of  India;  the  decay  of  those  flourishing  marts  with  which  the 
whole  coast  was  once  studded;  .  .  .  the  contraction,  and  in 
great  measure  the  ruin  of  trade ;  the  neglect  of  public  works  ; 
the  depreciation  of  agricultural  produce;"  which  last  "is  ob- 
served to  be  a  marked  feature  of  our  rule.  .  .  .  The  numerous 
local  markets  created  by  the  existence  of  the  native  princes," 
and  by  the  wide  existence  of  a  class  that  had  other  means  of 
subsistence  than  farming,  "and  which,  by  serving  as  centres  of 
money  circulation,  enhanced  the  value  of  produce  on  the  spot, 
disappeared."  "  The  trade  of  India  is  so  trifling,  as  compared 
with  its  agriculture,  that  the  trading  classes,  except  the  village 
bankers"  or  usurers,  '*  form  a  very  small  item"  (J.  M.  Lud- 
low). "  A  great  part  of  the  time  of  the  laboring  population  in 
India  is  spent  in  idleness.  I  don't  say  this  to  blame  them  in  the 
smallest  degree.  Without  the  means  of  exporting  the  crude  and 
heavy  agricultural  produce,  and  with  scanty  means,  whether  of 
capital,  science  or  skill,  of  elaborating  it  on  the  spot,  they  have 
really  no  inducement  to  exertion  beyond  what  is  necessary  tc 
gratify  their  present  and  very  limited  wishes  "  (Chapman). 

In  fine,  there  is  nothing  left  in  India  save  an  impoverishei 
agriculture  and  a  lifeless  trade.  The  Hindoo  cotton-grower  pro- 
duces the  raw  material  to  clothe  his  countrymen ;  but  it  reaches 
them  by  way  of  Calcutta  and  Manchester ;  the  skill  of  his  won- 
derful manufactures  is  being  lost.  He  pays  for  the  strip  of 
cloth  that  covers  his  own  nakedness  twenty  times  the  amount 


312  ELEMENTS    OF    POLITICAL    ECONOMY. 

of  cotton  that  it  contains.  To  carry  his  cotton  crop  even  to  the 
river  on  bullocks  costs  on  an  average  five  cents  a  pound,  and  em- 
ploys vast  numbers  of  the  people  and  of  cattle  in  laborious  and 
unproductive  work.  He  has  lost  the  power  of  association  with 
his  fellows;  no  man  needs  or  helps  his  neighbors;  all  need  and 
help  the  foreigner  only.  "  Half  the  human  time  and  energy  of 
India  runs  to  mere  waste,"  says  Mr.  Chapman;  and  elsewhere 
he  says  that  of  the  cultivable  surface  of  all  India  one-half  is 
waste.  In  1831  the  cotton  weavers  and  merchants  of  Bengal 
petitioned  the  English  Parliament  for  reciprocal  free  trade. 
They  found  their  "business  nearly  superseded  by  the  introduction 
of  the  fabrics  of  Great  Britain  into  Bengal,  the  importation  of 
which  augments  every  year,  to  the  great  prejudice  of  the  native 
manufacturers."  Knowing  "  the  immense  advantages  which 
the  British  manufacturers  derive  from  their  skill  in  construct- 
ing and  using  machinery,  which  enables  them  to  undersell  the 
unscientific  manufacturer  of  Bengal  in  his  own  country,'^  they 
were  "  not  sanguine  in  expecting  to  derive  any  great  advantage 
in  having  their  prayer  granted;'^  but  with  the  meekness  of  the 
Bengalee  they  ask  it  "  as  a  manifestation  of  your  lordships'  good 
will." 

Dr.  Bowring,  a  leading  champion  of  free  trade,  said  on  the  occasion  of 
this  petition  : — "It  is  a  melancholy  story  of  misery  so  far  as  they  are 
concerned,  and  as  striking  an  evidence  of  the  wonderful  progress  of 
manufacturing  industry  in  this  country.  Some  years  ago  the  East  India^ 
company  annually  received  of  the  produce  of  the  looms  of  India  6,000,000 
to  8,000,000  pieces  of  cotton  goods.  The  demand  has  now  nearly  ceased. 
In  1800  the  United  States  took  nearly  800,000  pieces;  in  1830,  not  4000. 
In  1800  1,000,000  pieces  were  shipped  to  Portugal;  in  1830  only  20,000. 
The  poor  India  weavers  are  now  reduced  to  absolute  starvation ;  numbers 
of  them  have  died  of  hunger.  And  what  was  the  sole  cause?  The 
presence  of  the  cheaper  English  manufacture, — the  production  by  the 
power-loom  of  the  article  which  they  had  been  used  for  ages  to  make 
by  their  unimproved  and  hand-directed  shuttles.  It  was  impossible  that 
they  should  go  on  weaving  what  no  one  would  wear  or  buy. '  But  at 
this  very  period  the  exportation  of  this  better  machinery,  and  even  the 
inducing  skilled  artisans  to  emigrate,  was  forbidden  under  heavy  penalties 
by  English  law.  At  the  same  time,  as  we  shall  see.  every  trade  exercised 
in  India,  and  every  tool  it  employed,  was  heavily,  taxed. 


INDIAN   REVENUES.  313 

Souio  feeble  attempts  to  revive  by  mild  protection  the  cotton  ucanu- 
facturea  of  India  have  latterly  been  made.  One  member  of  the  Man- 
chester Chamber  of  Commerce,  assailing  the  Canadian  Tariff  (see  g  271), 
told  Mr.  Gait:  "This  part  of  the  country  has  been  very  restive  lately 
Tinder  the  India  duties  of  five  per  cent.,"  and  another  that  "  Exactly  the 
eame  process  is  going  on  in  Canada  that  led  to  the  erection  of  cotton- 
mills  in  Bombay."  The  tariff  in  force  at  the  era  of  the  Rebellion  taxed 
British  cotton,  silk  and  woollen  goods,  and  metal  goods,  5  per  cent.; 
those  of  other  countries  twice  as  muchj  cotton  yarn  and  twist  from  Eng- 
land 3i  per  cent. ;  from  other  countries  10  per  cent.  This  was  changed 
in  1859  by  abolishing  the  discrimination  in  favor  of  British  goods,  fixing 
the  duty  on  thread  and  twist  at  five  per  cent.,  and  putting  a  duty  of  20 
per  cent,  on  haberdashery,  hosiery,  millinery,  and  some  other  classes. 
Mr.  Jas.  Wilson,  the  founder  of  the  Economiat,  becoming  Finance  Min- 
ister of  India  in  that  year,  changed  all  duties  on  manufactured  goods — 
including  yarns — to  10  per  cent.  But  the  pressure  of  direct  taxation  has 
again  forced  a  resort  to  high  duties,  and  the  people,  with  the  co-operation 
of  English  capital  this  time,  are  again  taking  to  manufacturing.  Man- 
chester protests,  but  it  can't  be  helped.  The  Spectator,  edited  by  an 
Anglo-Indian,  says  that  if  the  tariff  be  kept  long  enough  these  manu- 
factures will  survive  its  removal ;  but  that  as  long  as  coal  is  dear,  "  and 
the  habit  of  manufacturing  on  a  large  scale  is  not  yet  formed,"  they 
would  first  languish  and  then  die  out  under  free  trade. 

§  283.  The  revenue  from  duties  on  imports  being  destroyed, 
the  necessity  of  raising  money  to  pay  the  British  troops  and 
officials,  and  carry  on  the  government,  led  to  a  most  oppressive 
system  of  taxation  and  the  creation  of  monopolies.  Former 
Indian  governments  drew  the  revenue  from  a  land  tax,  at  first 
payable  in  kind,  but  after  the  Mohammedan  conquest  exacted — 
at  least  in  part — in  money.  The  English  adopted  the  same 
method,  but  (1)  they  carried  it  out  with  a  thoroughness  im- 
possible under  any  Oriental  government, — with  the  hard  rigidity 
of  a  Shylock.  (2)  They  insisted  on  payment  in  money  exclu- 
sively, forcing  the  tax-payer  to  find  a  market  for  his  goods,  and 
requiring  the  circulation  of  sums  hitherto  never  employed  in 
India,  yet  the  value  of  Indian  coin  declined.  Silver  was  nearly 
as  valuable  in  India  as  gold  in  Europe;  but  the  establish- 
ment of  absolutely  free  intercourse  and  competition  with  a 
European  nation  brought  its  value  down  to  the  European 
standard.     On  the  other  hand,  the  people  were  thrown  into  the 


314  ELEMENTS   OF    POLITICAL   ECONOMY. 

hands  of  the  native  usurers  who  had  control  of  the  great  mass 
of  the  coin  in  circulation  ;  these  vampires  form  the  only  class 
that  has  prospered  under  English  rule,  and  desires  its  con- 
tinuance. (3)  The  destruction  of  Indian  manufactures  has 
brought  down  the  price  of  raw  produce  and  food  by  removing 
the  workshops  of  India  to  the  British  islands.  It  is  by  the 
export  and  sale  of  these,  in  a  country  till  recently  almost  desti- 
tute of  roads  and  means  of  transportation,  that  the  land-tax  is 
raised.  In  many  instances,  from  60  to  70  per  cent  of  the  crop 
was  thus  employed,  and  outside  the  Deccan  the  average  was  fifty 
per  cent.  (4)  The  land-lax  levied  by  the  native  princes  was  ex- 
pended in  the  neighborhood  ;  if  in  money,  it  was  spent  on  articles 
of  native  manufacture.  By  the  policy  of  centralizing  the  gov- 
ernment, the  same  fund  was  now  expended  mostly  in  distant 
parts  of  the  country,  and  much  of  it  in  paying  salaries  in 
London,  still  more  in  the  payment  of  high  salaries  to  foreign 
officers  "  without  root  in  the  country,  who  either  save  money  for 
the  purpose  of  carrying  it  away,  or  spend  it  for  the  most  part  on 
articles  of  British  growth  and  manufacture;  they  being  more- 
over few  in  number  and  residing  only  in  the  chief  towns'' 
(Ludlow).  "  Formerly,"  the  native  would  say,  ^'  the  govern 
ments  kept  no  faith  with  their  land-holders  and  cultivators,  ex- 
acting ten  rupees  where  they  had  bargained  for  five  whenever 
they  found  the  crops  good ;  but  in  spite  of  all  this  zolm  (op- 
pression) there  were  then  more  hurhut  (blessings)  than  now. 
The  lands  yielded  more  returns  to  the  cultivator,  and  he  could 
maintain  his  family  better  upon  five  acres  than  he  can  now  upon 
ten"  (Col.  Sleeman  :  Rambles  in  India). 

But  this  oppressive  land-tax  is  not  sufficient  for  the  needs  of 
the  government,  and  monopolies \\2iwe;  been  created  to  supplement 
it.  (1)  When  the  English  began  the  conquest  of  India,  its 
people  were  noted  for  "  their  total  abstinence  from  spirituous 
liquors  and  other  intoxicating  substances  "  (Warren  Hastings). 
The  government  have  set  up  distilleries,  and  supplied  "  arrack,*' 
a  fierce  alcoholic  drink,  to  licensed  venders.  It  used  its  facilities 
to  establish  new  depots  for  the  sale  where  none  were  known 


SALT   AND   OPIUM    MONOPOLIES.  315 

before.     The   price  is  low ;  the  sale  immense ;  the  spread  of 
drunkonness  is  going  on  over  the  whole  land;  and  petitions  for 
a  prohibitory  law  come  to  Jlngland  from  the  most  public-spirited 
of  the  natives.     (2)  The  Hindoo  lives  very  largely  on  rice  and 
fish,  consequently  needs   a   considerable   amount  of  salt, — far 
more  than  those  who  live  on  wheat  and  flesh.     Instead  of  a  light 
tax  imposed  by  previous  rulers,  the  E.  I.  Company  established 
a  monopoly  of  the  manufacture  by  which  the  price  was  raised  to 
famine  rates,  and  it  needed  three  months*  work  of  a  ryot  in  the 
interior  to  provide  salt  for  a  small  family,  while  fish  were  carried 
inland    half-salted  or    unsalted,  and    used   in    a   state  of  half- 
putrefaction.     Fortunately  the  English  salt-makers  could  not  be 
excluded  from  the  Indian  market,  and  their  importations  forced 
down    the   price,  while  it   diminished    the   demand  for   labor. 
**  Imagine,"  says  Mr.  Ludlow,  '^  the  possibility  of  Cheshire  salt, 
produced  in  a  damp  and  comparatively  cold  climate  like  ours, 
under  all  the  disadvantages  of  rent  and  royalty,  rates  and  taxes, 
interest  on  capital  and  a  high  price  of  labor — after  being  carried 
bulky  as  it  is,  to  the  other  end  of  the  world — being  sold  to  one 
of  the  poorest  populations  of  the  world  cheaper  than  that  manu- 
factured on  their  own  coasts,  where  evaporation  takes  place  with 
extraordinary  rapidity ;  where  labor  is  at  two  pence  a  day ;  by 
a  government  which  pays  neither   rent  nor  royalty,  rates  nor 
taxes  I"     Yet  even  since  tiiis  alleviation,  salt  sold  (1855)  for  14 
times  its  cost  at  Madras,  and  £72  a  ton  wholesale  in  the  interior; 
and  the  average  consumption  was  one-third  as  much  per  head 
of  the  people  as  the  company  supplied  to  its  Sepoys.     And  in 
many  ways  the  monopoly  checks  industry,  restricts  the  fisheries, 
and  hinders  the  keeping  of  cattle.     (3)  The  monopoly  of  opiura 
of  Bengal  began  in  1795,  the  object  being  to  supply  the  article 
to  the   armed  smu^'glers  who  introduce    it  into  China  in   spite 
of  the  efforts  of  the  government  to  exclude  the  pestiferous  drug. 

See  The  Opinm  Trade,  as  carried  on  in  India  and  China,  by  Dr.  Nathan 
Allen.  Lowell  1850.  2d  Edition,  1853.  The  attempts  of  the  ChinePt 
government  to  suppress  the  traffic  was  the  chief  if  not  the  only  cause  of 
the  "  Opium  War  "  betweeu  England  and  China  in  1840-1.     In  a  petition 


316  ELEMENTS   OF    POLITICAL   ECONOMY. 

addressed  to  the  English  government  by  the  merchants  engaged  in  it,  it 
is  said,  "  That  the  trade  in  opium  had  been  encouraged  iftid  promoted  by 
the  Indian  government  under  the  express  sanction  and  authority,  latterly 
of  the  British  government  and  Parliament,  and  with  the  full  knowledge 
also,  as  appears  from  the  detailed  evidence  before  the  House  of  Commons 
on  the  renewal  of  the  charter"  of  the  E.  I.  Company  in  1833,  "that  the 
trade  was  contraband  and  illegal."  When  it  was  proposed  in  Parliament 
to  suppress  the  monopoly,  and  thus  put  an  end  to  the  contraband  trade, 
a  committee  reported  :  "  In  the  present  state  of  the  revenue  of  India  it 
does  not  appear  advisable  to  abandon  so  important  a  source  of  revenue, 
— a  duty  upon  opium  being  a  tax  which  falls  principally  upon  the  foreign 
consumer,  and  which  appears  upon  the  whole  less  liable  to  objection 
than  any  other  that  could  be  substituted."  The  Emperor  refused  to  legal- 
ize what  he  could  not  put  a  stop  to,  declaring  "  nothing  will  induce  me  to 
derive  a  revenue  from  the  vice  and  misery  of  my  people." 

But  wherever  opium  is  grown  it  is  used;  and  the  company's 
servants  tell  us  that  "  One  opium  cultivator  demoralizes  a 
whole  village;  and  that  one-half  the  crimes  in  the  opium  dis- 
trictSj — murders,  rapes,  and  affrays, — have  their  origin  in  opium- 
eating."  The  ryot  was  not  allowed  to  profit  much  by  the  crop ; 
before  planting  the  poppies  he  must  make  an  engagement  to  sell 
the  juice  at  a  specified  price,  and  to  the  government  alone; 
when  they  were  ripening,  his  fields  were  examined,  the  amount 
of  the  yield  estimated,  and  another  engagement  to  furnish  at 
least  that  quantity  was  made.  If  less  was  furnished,  he  was 
heavily  fined  for  neglect;  if  the  government  advanced  him 
money — as  was  commonly  done — tot)uy  seed  and  get  the  crop 
in,  he  paid  twelve  per  cent,  interest.  Nor  had  he  his  choice  as 
to  whether  he  would  plant  the  poppies ;  he  was  forced  to  give 
up  a  portion  of  his  land  to  them.  (4)  Equally  oppressive  and 
exacting  were  the  methods  pursued  in  carrying  on  the  monopoly 
of  tobacco  on  the  Malabar  coast.  But  these  are  only  a  few  out 
of  a  multitude  of  monopolies  resorted  to  in  order  to  avoid  taxing 
the  importation  of  British  manufactures.  The  mofvrph'a,  one 
of  the  worst  abominations  of  Moslem  finance,  was  levied  upon 
the  exercise  of  every  trade  and  occupation,  sometimes  in  the 
form  of  a  license,  sometimes  as  a  tax  upon  the  tools  employed, 
often  at  six  times  their  cost.     A  tax  was  laid  on  every  cocoanut 


Belgium's  industrial  record.  317 

tree;  on  the  knife  with  which  the  tree  was  tapped  for  its 
saccliarine  juice  j  on  the  pot  in  which  the  juice  was  boiled. 
The  fisherman  paid  a  tax  for  the  very  stone  on  which  he  beat 
his  clothes.  A  petition  sent  to  England  by  the  natives  of 
Madras  complains  of  the  practice  of  annually  *'  leasing  out  to 
individuals  certain  privileges,  such  as  the  right  of  measuring 
grain  and  other  articles  j  the  right  to  the  sweepings  of  the  gold- 
smiths' shops;  the  right  of  dyeing  betelnut;  of  cutting  wood 
in  the  jungle ;  of  grazing  cattle  ;  of  gathering  fruit  and  wild 
honey;  of  catching  wild-fowl ;  of  cutting  grass  for  thatch,  and 
rushes  for  baskets  j  of  gathering  cow-dung,  and  innumerable 
other  such  rights  of  levying  taxes  on  the  poorest  of  the  poor." 
In  Malabar  the  company  claimed  all  the  wax  made  by  the  bees, 
leaving  only  the  honey  to  the  keepers ;  and  actually  destroyed 
several  branches  of  industry  by  exacting  a  license  for  their 
exercise. 

§  284.  The  progressive  peoples  are  in  every  case  those  who 
have  fostered  and  protected  national  industry  by  national  legisla- 
tion. 

(1)  Belgium,  "that  old  cockpit  of  Europe,"  is  inhabited  by 
two  peoples,  "  who  speak  different  tongues,  intermingle  but 
little,  are  jealous  of  each  other,  and  inhabit  different  halves  of 
the  kingdom.  The  one  occupying  the  northern  half  of  the 
kingdom,"  the  Flanders  provinces,  where  Flemish  is  spoken,  "  is 
now  famous  for  its  husbandry  alone,  though  once  as  famous  for 
its  manufactures."  Its  linens,  woollens,  and  other  fabrics  held 
the  markets  of  the  world  until  the  seventeenth  century,  when 
the  protective  policy  of  England  and  France  fully  acclimatized 
these  manufactures  on  their  own  soils.  Its  superior  skill  in  linen 
weaving  enabled  it  to  retain  a  large  measure  of  that  industry, 
until  the  invention  of  spinning  and  weaving  machines  superse- 
ded the  spinning-wheel  and  the  hand-loom.  Its  deficiency  of 
coal,  and  the  prohibition  upon  the  export  of  linen  machinery 
from  the  British  Islands,  kept  up  till  1842,  forbade  competition 
with  the  power-loom,  and  the  country  was  reduced  to  a  number 
of  small  local  industries."     For  till  1844  Belgium  was  a  Free 


318  ELEMENTS   OF    POLITICAL    ECONOMY. 

Trade  country.  Under  the  imperial  rule  of  Napoleon  she  sliared 
in  an  unusual  degree  in  the  impulse  that  the  continental  sys-, 
tern  imparted  to  the  manufocturers  of  the  Continent,  Her 
cottons  and  woollens  were  noted  for  their  excellency,  and  com- 
manded the  French  markets.  But  the  cheaper  price  of  the  in- 
ferior goods  with  which  England  flooded  the  Continent  on  the 
return  of  peace  inflicted  great  injury  upon  both  manufactures, 
especially  that  of  cottons.  Being  transferred  from  Spain  to 
Holland  by  the  Treaty  of  Vienna,  Belgium  had  free  access  to 
the  markete  of  the  latter  and  its  colonies.  But  the  Revolution 
which  gave  her  independence  in  1830  closed  both  these  against 
her.  The  new  government,  taking  its  cue  from  the  English 
Whigs,  who  had  given  it  raoral  support,  announced  the  purpose 
that  Belgium  should  be  an  agricultural  country,  contented  with 
"  the  commerce  of  commission  and  transit "  as  a  port  of  entry 
for  English  goods  on  their  way  to  the  Continent.  The  Liberal 
party  upheld  this  course,  but  some  of  the  clerical  party,  notably 
the  Abbe  Defoer,  contended  for  protection  to  home  industry. 
They  pointed  to  the  increasing  prostration  of  manufactures;  to 
the  repeated  failures  of  new  enterprise  through  their  exposure 
to  unfair  competion,  English  goods  selling  at  one-fourth  less 
than  the  London  price,  as  long  as  any  one  attempted  to  make- 
them  in  Belgium,  and  French  agents  acting  for  years  together 
under  general  orders  to  undersell  the  native  manufacturers. 
They  showed  that  although  coal  and  iron  had  been  found  in 
close  proximity  in  the  southern  (Walloon,  or  French  speaking) 
provinces,  yet  no  general  success  had  attended  the  attempts  to 
develop  this  and  the  other  vast  resources  of  the  country. 
Associations  and  companies  had  been  formed ;  there  had  been  a 
Bort'  of  mania  for  industrial  associations,  but  they  came  to 
nothing.  At  last  a  government  inquiry  into  the  state  of  Bel- 
gian commerce  and  industry  was  ordered,  and  in  1842  it  re- 
ported ;  in  1844  the  first  Belgian  protective  tarifi"  was  adopted, 
and  Holland  followed  the  example  in  1845;  in  1846  a  commer- 
cial treaty  on  the  basis  of  reciprocity  was  eff"ected  between 
the   two    countries,  in   order  that  this  new  tarifl"  might  in  no 


tU^   BELGIAN  TARIFF  AND  ITS  EFFECTS.     319 

way  interfere  with  their  old  commercial  relations.  The 
results  are  known  to  all  the  world  in  the  rapid  and  vast  de- 
velopment of  manufactures  in  the  Walloon  provinces,  which 
now  compete  with  the  English  in  the  British  markets  and  those 
of  the  world.  Even  in  the  north  "  steam  factories  are  now 
rising  in  Flanders — the  excellence  of  its  flax,  and  the  industry 
and  manipulative  skill  of  its  numerous  rural  population,  may  go 
far,  as  regards  the  manufacture  of  linen,  to  compensate  for  the 
total  absence  of  iron  and  coal."  Two  Englishmen,  selected  by 
the  iron  masters  to  ascertain  the  reasons  of  this,  made  inquiries 
on  the  Continent,  and  report  that,  "  with  the  advantage  of  pos- 
sessing the  best  and  most  skilled  workmen  in  the  world,  Belgium 
and  France  have  been  thrusting  us  out  of  foreign  markets  to  an 
extent  which  the  public  will  hardly  credit,  and  of  which  the 
trade  itself  is  hardly  aware."  ....  For  instance,  in  Spain, 
"  England  is  thrust  aside,  defeated  by  Belgium  and  France. 
We  cannot  compete  with  their  producers  either  in  price  or  in  con- 
tinuousness  and  certainty  of  supply.  Nor  is  this  all.  Even  at 
home  these  industrious  and  pushing  people  are  challenging  our 
supremacy,  and  that  not  infrequently  with  success.  In  bar 
iron,  in  rails,  in  engines  for  agricultural  purposes,  and  even 
in  locomotives  for  railways,  they  have  lately  been  obtaining 
orders  in  our  own  market." 

It  is  easy  to  believe  that  this  is  rather  an  overstatement  of 
the  case,  but  it  has  truth  enough  to  be*  unpleasant  reading  in 
Birmingham.  Upon  it  they  base  a  plea  that  English  workmen 
should  be  contented  with  lower  wages,  in  order  that  their  em- 
ployers may  compete  with  the  cheaper  labor  of  the  Continent. 
But  the  development  of  manufactures  in  Southern  Belgium  has 
caused  a  great  advance  in  the  rate  of  wages,  and  by  furnishing 
the  farmer  with  a  near  and  steady  njarket,  has  made  him  fully 
able  to  pay  these.  Protection  has  also  naturalized  in  those  pro- 
vinces new  species  of  tillage,  such  as  the  culture  of  beets  for 
sugar,  from  which  the  bulk  of  the  sugar  now  used  in  Belgium 
is  derived.  "  The  Walloon  farm  laborer  earns  two  francs  a  day, 
and  often  more,  while  the  Fleming  earns  but  one."  "  The  line 


320  ELEMENTS    OF   POLITICAL   ECONOMY. 

of  division  between  high  and  low  wages  closely  corresponds  with 
the  line  of  division  between  tlie  two  races ;"  it  is  also  like  the 
same  line  in  England,  the  line  of  division  between  the  purely 
agricultural  and  the  manufacturing  districts.  Liege  lies  on  the 
line  ;  three  miles  south  of  it  farm  wages  are  twice  as  high  as 
they  are  three  miles  north  of  it.  The  northern  provinces,  in 
spite  of  the  unequalled  agriculture,  which  has  turned  Flanders 
into  a  garden,  are  afflicted  with  pauperism.  When  hand-loom 
weaving  ceased  it  was  at  its  height ;  in  1848  there  were  nearly 
200,000  "  indigents,"  one-fourth  of  whom  were  women  who 
had  lived  by  spinning.  The  blow  fell  heavily  on  the  farming 
class  also,  as  the  small  holders  lost  the  employment  by  which 
they  eked  out  a  living,  and  lost  the  home  market  for  their 
flax.  But  even  Flanders  is  rallying  under  the  shelter  of  the 
protection  that  might  have  saved  her  workmen  from  beggary  in 
the  process  of  adopting  better  methods  of  manufacture. 

"  If  any  one,"  says  a  Belgian  Free  Trader,  "  had  left  the 
country  in  1835,  after  having  visited  our  principal  manufactu- 
ring centres,  and  were  to  come  back  to  it  now,"  in  1861,  "  he 
would  be  struck  with  the  transformation  that  they  have  under- 
gone, the  advances  they  have  achieved ;  he  would  find  a  nume- 
rous, intelligent  and  active  population  of  working  people,  where, 
a  quarter  of  a  century  ago,  he  would  have  seen  nothing  but 
country  houses  scattered  at  wide  intervals  over  extensive  plains. 
As  a  consequence,  production,  except  of  articles  of  food,  has 
outrun  the  needs  of  the  population,  although  it  has  increased  in 
numbers  and  in  wealth,  and  we  are  obliged  to  seek  for  foreign 
outlets." 

See  J.  F.  Constant :  Du  Regime  Protecteur  en  Economie  Politique, 
Bruxelles,  1842.  H.  F.  Matthysens  :  La  HoUunde,  V Anr/leterre,  et  la 
Belyique  ;  Anvers  1850.  De  Laveleye  ;  L' Economie  Rurale  de  Delgique 
(largely  reproduced  in  CliflFe  Leslie's  Land  Systems  and  Industrial  Eco- 
nomy.) Ejusdem  :  "The  Land  Systems  of  Belgium  and  Holland"  in 
Cobden  Club  Essays  on  Systems  of  Land  Tenure ;  London  1870.  H.  H, 
Creed  and  W.  Williams,  Jr. :  Handicraftsmen  and  Capitalists;  London. 

S  285.  (2).  Germany  is  now  taking  her  place  among  the 
great  industrial  nations,  through  the  removal  of  all  restrictions 


FREDERICK   IN  THE   ROLE  OF  COLBERT.  321 

upon  internal  commerce  and  the  legislative  fostering  of  home 
industry.  The  second  king  of  Prussia,  gruflf  old  Frederick  Wil- 
helui,  and  his  son,  the  great  Frederick,  began  the  work  of  raising 
the  land  to  the  place  to  which  its  vast  resources,  its  intellectual  vigor 
and  its  past  history  entitle  it.  "  Frederick,"  says  his  greatest 
biographer,  "  was  the  reverse  of  orthodox  in  '  Political  Economy'; 
he  had  not  faith  in  free  trade,  but  the  reverse;  nor  had  ever 
heard  of  those  ultimate  evangels,  unlimited  competition,  fair  start 
and  perfervid  race  by  all  the  world  (towards  ^Chtap-aiid- 
NastT/'  as  the  likeliest  winning-post  for  all  the  world),  which 
have  since  been  vouchsafed  to  us.  Probably  in  the  world  there 
never  was  less  of  a  free  trader.  .  .  .  The  desperate  notion  of 
giving  up  government  altogether,  as  a  relief  from  human  block- 
headism  in  your  governors,  and  their  want  of  even  a  wish  to  be 
just  or  wise,  had  not  entered  into  the  thoughts  of  Frederick. 
.  .  .  Many  of  Frederick's  restrictive  notions,  as  that  of  watch- 
ing with  such  anxiety  that  '  money '  (gold  or  silver  coin)  be  not 
carried  out  of  the  country,  will  be  found  mistakes,  not  in  orthodox 
Dismal  Science  as  now  taught,  but  in  the  nature  of  things ;  and 
indeed  the  Dismal  Science  will  generally  excommunicate  them 
in  a  lump,  too  heedless  that  fact  has  conspicuously  vindicated  the 
general  sum-total  of  them,  and  declared  it  to  be  much  truer  than 
it  seems  to  the  Dismal  Science.  Dismal  Science  (if  that  were 
important  to  me)  takes  insufficient  heed,  and  does  not  discrim- 
inate between  times  past  and  times  present,  times  here  and 
times  there." 

"  In  improving  the  industries  and  husbandries  among  his 
people,  his  success,  though  less  noised  of  in  foreign  parts,  was  to 
the  near  observer  still  more  remarkable.  A  perennial  business 
with  him  this,  which  even  in  time  of  war  he  never  neglected, 
and  which  springs  out  like  a  stemmed  flood  whenever  peace 
leaves  him  free  for  it.  His  labors  by  all  methods  to  awaken  new 
branches  of  industry,  to  cherish  and  further  the  old,  are  incessant, 
manifold,  unwearied,  and  will  surprise  the  uninstructed  reader 
who  comes  to  study  them.  .  .  .  Certain  it  is,  King  Frederick's 
success  in  National  Husbandry  was  very  great.  The  details  of 
21 


322  ELEMENTS    OF   POLITICAL    ECONOMY. 

the  very  many  new  manufactures,  new  successful  ever-spreading 
enterprises,  fostered  into  existence  by  Frederick  ;  his  canal- 
makings,  road-makings,  bog-drainings,  colonizings  and  unwearied 
endeavorings,  will  require  a  technical  philosopher  one  day,  and 
will  well  reward  such  study  and  trouble  of  recording  in  a  human 
manner,  but  must  lie  massed  up  here  in  mere  outline  on  the 
present  occasion."  Excepting  some  small  mention  of  two  Prus- 
sian chemists,  that  are  busied,  with  aid  and  comfort  from  this 
protectionist  king,  in  getting  sugar  out  of  beet-juice — Herr  Mar- 
grafF,  1747  till  1773,  and  after  him  a  French  Monsieur  Achard, 
refugee  for  his  religion.  This  latter  finds  a  second  partner  in 
Napoleon,  with  notable  results  for  France  (§  257). 

See  Carlyle's  Frederick  the  Great,  Book  XVI.,  Chapter  VIII.  Also 
Book  XXL,  Chapter  II.,  where  the  younger  and  greater  Mirabeau's 
Monarchie  PruHHienne  (Paris  1788),  a  free  trade  pamphlet  in  eight  octavo 
volumes,  is  noticed  with  the  summing  up  :  "  M.  le  Comte,  would  there 
have  been  in  Prussia,  for  example,  any  trade  at  all,  any  nation  at  all, 
had  it  always  been  left  '  free '  ?  There  would  have  been  mere  sand  and 
quagmire,  and  a  community  of  wolves  and  bisons,  M.  le  Comte." 

In  Mr.  Carlyle's  earlier  works  he  accepts  the  results  of  the  Dismal 
Science — as  he  was  the  first  to  nickname  Political  Economy — as  a 
"Divine  Message,"  though  "perhaps  as  small  a  message  as  ever  there 
was  such  noise  made  about  before,"  {Latter  Day  Pamphlets,  1850).  He 
seems  to  have  now  got  beyond  that,  converted  by  the  evidence  of  facts. 

§  286.  Frederick's  unfriend,  the  Empress  Maria  Theresa,  and 
her  son  and  successor,  Joseph  II.,  labored  much  the  same  way 
for  the  promotion  of  industry  in  Austria.  They  all  made  the 
mistake  of  leaving  domestic  industry  under  manifold  restrictions, 
which  went  far  to  balance  the  protection  against  foreign  inva- 
sions. The  practice  of  trade  was  confined  to  limited  corpora- 
tions;  heavy  excise  duties  and  monopolies  kept  back  home  pro- 
duction ;  instead  of  one  national  Prussian  tarifi"  there  were  sixty- 
seven,  for  every  boundary  line  that  divided  province  from  prov- 
ince was  a  line  of  customs'  duties,  shutting  out  the  home  manu- 
facturer from  his  rightful  market.  Equally  unwise,  but  quite  in 
keeping  with  this,  was  the  prohibition  of  the  importation  of 
certain  manufactured  goods,  and  of  the  export  of  raw  materials. 
The  numerous  privileged  classes  were  exempt  from  the  action  of 


FROM   BAD   TO   WORSE.  323 

these  laws,  and  could  bring  in  what  they  pleased.  Soiuggling 
was  made  a  science,  and  supported  by  public  opinion  ;  of  the 
great  mass  of  officials  required  by  the  system,  very  few  were 
above  taking  bribes.  These  mischiefs  came  to  a  head  under 
Frederick's  worthless  successors,  who  intensified  all  the  faults 
and  neglected  all  the  good  points  of  his  system.  Adam  Smith's 
doctrines  were  becoming  popular  in  Germany ;  Kraus  of  Koeniga- 
berg  and  others  taught  them  from  professional  chairs.  A  new 
generation  of  officials  grew  up  under  this  teaching,  who  detested 
their  country's  meddlesome  and  vexatious  fiscal  policy  for  its 
faults,  without  understanding  its  merits. 

At  last  free  trade  became  a  recognised  maxim  of  Prussian 
policy.  The  king  proclaimed,  during  the  struggle  with  Napoleon, 
that  all  prohibitions  were  cancelled,  and  all  duties  were  reduced  to 
Si  per  cent,  in  the  provinces  not  in  possession  of  the  enemy,  and 
when  the  "  War  of  Liberation  "  broke  out  in  1813,  the  proclama- 
tion was  renewed.  In  the  meantime  the  Continental  system  had 
been  extended  to  Germany ;  British  and  Colonial  goods  were  ex- 
cluded from  her  markets,  while  those  of  France  came  thither 
free  of  duty  "  by  right  of  conquest,'^  without  any  grant  of  reci- 
procity. "■  German  industry  made  admirable  progress  during 
that  time,  not  only  in  the  different  manufacturing  branches,  but 
in  all  branches  of  agriculture,  though  laboring  under  all  the  dis- 
advantages of  the  wars  and  of  French  despotic  measures.  All 
kinds  of  produce  were  in  demand,  and  bore  high  prices;  and 
wages,  rent,  interest  of  capital,  prices  of  land,  of  all  sorts  of 
property,  were  enhanced"  (List).  The  lower  Rhine,  as  hav- 
ing been  longest  under  the  French  rule,  made  the  greatest 
advance.  Perhaps  Saxony,  hitherto  a  free  trade  country,  and 
the  great  depot  for  the  dispersion  of  British  goods  over  Central 
Europe,  came  next  in  point  of  industrial  progress  Germany  en- 
joyed prosperity  without  example  at  the  very  time  when  her 
people  were  drinking  the  bitter  cup  of  national  humiliation. 
The  victories  that  restored  the  independence  of  European 
nationalities  brought  disaster  to  their  material  interests;  it  threw 
open  their  markets  to  the  competition  of  their  insular  ally,  and 


324  ELEMENTS    OF    POLITICAL    ECONOMY. 

set  up  all  the  old  lines  of  demarcation  that  divided  Germany 
into  a  few  large  states  and  a  host  of  microscopic  despotisms. 
Twenty-seven  of  these  custom-house  lines — one-third  of  tho 
whole  number — lay  across  the  Rhine,  and  at  each  of  them  com- 
merce was  impeded  with  duties  and  delays.  The  German  mer- 
chant had  no  field  of  activity  outside  his  own  little  principality ; 
Germany  enjoyed  protection  in  each  of  its  members  from  all  the 
rest,  and  at  the  same  time  virtual  free  trade  with  the  foreigner. 
The  cry  of  ruined  merchants  and  unemployed  workmen  led 
Prussia  to  undertake  an  elaborate  investigation  of  her  own  indus- 
trial needs.  The  ministry  of  Hardenberg  and  Van  Biilow  had 
proposed  to  keep  up  the  present  low  tariff,  but  make  it  specific 
in  the  nature  of  the  duties  imposed,  and  to  abolish  all  provincial 
restrictions  on  commerce.  The  matter  was  referred  to  the 
Council  of  State,  who  recommended  the  appointment  of  a  spe- 
cial commission  of  inquiry,  and  the  king  selected  one  under  the 
presidency  of  Wilhelm  von  Humboldt.  After  a  prolonged  in- 
vestigation, in  which  all  interests  had  a  hearing,  the  commission 
decided  in  favor  of  a  moderately  protective  system,  with  the 
removal  of  all  prohibitions  on  exportation  or  importation,  and 
of  all  local  restrictions  upon  trade.  There  were  only  two  dis- 
senting voices — both  disciples  of  Adam  Smith — in  the  commis- 
sion ;  only  three  in  the  Council  of  State ;  the  results  were  em- 
bodied in  the  Prussian  tariff  of  1818. 

As  if  with  a  view  of  illustrating  both  sides  of  the  case  at  once,  Prussia 
in  1822  demanded  reciprocity  with  England  in  the  matter  of  the  Naviga- 
tion laws,  and  in  1824  Mr.  Huskisson  granted  it.  "  The  effect  of  reci- 
procity upon  the  Prussian  mercantile  navy,"  says  an  ardent  free  trader, 
"  has  been  to  diminish  it  most  materially  in  amount,  while  British  ship- 
ping gains  an  ever-increasing  share  in  her  carrying  trade.  This  case  is 
quite  sufficient  to  show  what  would  inevitably  be  the  result  of  a  fair  and 
free  competition  between  British  shipping  and  the  shipping  of  any  other 
country  (in  this  hemisphere  at  least),  with  which  it  comes  in  contact," 
(W.  P.  Adam  :  The  Policy  of  Retaliation',  London,  1852).  The  Prussian 
shipping  fell  off  44  per  cent,  in  the  number  of  vessels  and  2^  per  cent,  in 
their  tonnage  between  1806  and  1839,  although  the  commerce  of  tho 
country  increased  vastly.  See  Porter's  Progress  of  the  English  Nation^ 
y.  396. 


THE   ZOLLVEREIN.  325 

§  287.  At  the  same  time  a  movement  in  favor  of  protection 
to  German  industry  and  the  removal  of  all  custom-houses  to  the 
German  frontier  was  going  on  in  the  centre  and  south  of  Germany. 
Friedrich  List,  then  a  professor  in  the  University  of  Tuebin- 
gen,  was  put  forward  as  its  spokesman.  It  aimed  at  a  national 
tariff  system  for  all  Germany,  and  in  1820  succeeded  in  securing 
a  preliminary  treaty  at  a  conference  of  German  ministers  at 
Vienna,  and  then  a  special  conference  at  Darmstadt.  Then  fol- 
lowed the  est<iblishment  of  three  Zollvereins, — one  for  North- 
western and  Central  Germany,  headed  by  Saxony,  Brunswick 
and  Hanover,  with  low  revenue  tariff;  one  for  Southern  Ger- 
many, including  Bavaria,  Wurtemberg,  and  some  minor  states; 
a  third  in  the  North,  consisting  of  Prussia  and  the  minor  states 
in  her  immediate  neighborhood  (Hesse,  Nassau,  «fec.),  who  adopt- 
ed the  tariff  of  1818.  At  last,  in  1833,  the  last  two  and  those 
of  the  first  that  lay  in  Central  Germany  united  on  the  basis  of 
that  tariff,  including  in  this  great  Zollverein  about  twenty-six 
millions  of  the  German  people.  Austria  on  the  south,  and 
Hanover,  Brunswick,  Oldenburg,  Mecklenburg  and  the  Free 
Cities  on  the  north,  alone  stood  out.  Hanover,  Brunswick  and 
Oldenburg,  under  English  influence,  formed  in  1828  a  Steuer- 
verein  with  a  tariff  of  low  duties  for  revenue ;  as  they  shut  out 
the  Zollverein  from  the  North  Sea,  the  latter  attempted  a  union 
with  them  in  1841,  but  found  that  it  could  only  be  secured  at 
the  sacrifice  of  protection  to  native  industry.  In  1853  the  an- 
nexation was  secured,  on  condition  that  Hanover  should  receive 
seventy-five  per  cent,  more  than  the  share  of  the  revenue  to 
which  her  population  would  otherwise  entitle  her.  From  1849 
Austria  strove  to  either  break  up  the  Zollverein  or  get  admission 
to  it  with  all  her  dependencies.  Many  of  the  minor  states  favored 
this  latter  proposal,  and  it  seemed  likely  that  Prussia,  in  resist- 
ing it,  would  bring  on  war.  But  in  1853  a  reciprocity  treaty 
between  the  two  powers  put  an  end  to  the  struggle. 

Zollverein  means  Customs*  Union;  <S'^cKerfereiH,  Imposts'  Union.     The 
latter  was  an  imitation  of  the  former,  without  its  protective  purpose. 

In    tht    Zollverein    each   state  has  an  equal  vote,  although 


326  ELEMENTS   OF   POLITICAL   ECONOMY. 

Prussia  had  till  1852  more  than  hall'  the  population.  Another 
Bacrifice  made  by  Prussia  for  the  general  interest  was  in  the 
distribution  of  the  customs'  receipts  on  the  basis  of  population  ; 
small  states  with  a  farming  population,  got  far  more  than  their 
true  share;  Prussia  got  half  a  million  thalers  a  year  less, 
and  asked  no  more,  although  Frankfort-on-Main  in  joining  the 
Zollverein  in  1835  received  a  larger  share  than  her  population 
would  justify.  The  duties  are  assessed  on  the  basis  of  the  ta- 
riff of  1818,  subject  to  modification  at  the  conference  of  repre- 
sentatives. These  modifications  are  of  a  sort  to  show  the  Pro- 
tectionist purpose  of  that  tariff,  and  of  the  Zollverein  itself. 
Thus  in  1843-5,  the  duty  on  cotton  goods  fixed  in  1818  at  12^  per 
cent.,  was  very  decidedly  increased  to  meet  English  competition  ; 
in  1844  the  duties  on  iron  were  increased  for  the  same  reason. 
The  duties  on  all  importations  are  estimated  to  average  12  per 
cent.,  but  as  a  great  part  of  these  are  low  duties  on  the  raw  ma- 
terials of  manufacture,  the  duties  on  manufactured  goods  must 
be  sufficiently  high.  Dr.  Bowring,  who  was  sent  out  by  the 
British  G-overnment  to  examine  and  report  upon  the  Zollverein 
in  1841,  clearly  showed  the  Protective  character  of  the  tariff. 
Professor  List  estimated  the  duties  on  manufactured  articles  in 
common  use  at  from  20  to  60  per  cent.  "  The  most  popular  ob- 
ject of  this  great  social  movement  is,  by  a  prudent  and  well 
constructed  tariff  of  duties,  to  protect  and  encourage  German 
manufactures,  to  exclude  by  duties  the  foreign  producer  from 
the  German  market  [?],  and  to  extend  the  exportation  of  the 
products  of  their  own  industry  to  foreign  markets"  (S.  Laing). 
One  of  the  best  and  most  protective  features  of  the  system  is 
its  imposition  of  specific  duties,  changed  in  their  amount  ac- 
cording to  a  periodical  observation  of  the  market  prices.  No 
room  was  left  for  false  invoices ;  none  for  the  foreign  exporter 
to  throw  foreign  goods  on  the  market  at  a  merely  nominal 
price,  after  paying  merely  nominal  duties,  so  as  to  undersell  the 
German  maker  at  a  small  sacrifice.  At  the  same  time  the 
duties  fell  more  heavily  upon  the  cheaper  and  more 
commonly  used  articles,  whose  production   at  home  is  of  tha 


THE   EFFECT    OF   THE   ZOLLVEREIN.  327 

first  importance,  and  though  requiring  less  of  skill  in  the  work- 
ingman,  gradually  educates  him  in  the  skill  and  taste  neces- 
sary for  the  production  of  finer  wares. 

§  288.  The  carefully  prepared  statistics  of  the  business  of  the 
Zollverein,  in  home  production  and  consumption  as  well  as  im- 
portation, give  us  the  data  for  estimating  the  effects  of  the  sys- 
tem. We  find  (1)  That  protection  has  vastly  increased  the 
power  of  the  German  people  to  command  the  services  of  other 
peoples.  The  importations  have  risen  steadily  in  amount  and 
quality,  instead  of  decreasing.  "  If  we  look  at  its  practical  ef- 
fects upon  British  industry,  we  are  warranted  in  the  conclusion 
that  the  wealthier  and  more  industrious  our  neighbors  become, 
the  better  customers  they  are  in  the  world's  markets,  in  supply- 
ing which  British  industry  and  capital  are  embarked"  (Laing.") 

(2)  The  wages  of  labor  have  been  very  largely  raised,  for  both 
farm  hands  and  factory  hands.  Not  only  has  more  money  been 
paid  for  a  day's  work,  but  so  much  more  as  enables  the  working- 
men   to  command  a   much   larger  amount  of  material  comfort. 

(3)  The  farmer  has  not  lost  what  the  manufacturer  has  gained, 
but  has  gained  equally  with  him  ;  the  prices  of  raw  materials 
and  of  manufactured  goods  have  steadily  approximated,  as  the 
market  has  been  brought  nearer  the  farm.  (4.)  The  total  con- 
sumption of  articles  of  prime  necessity  has  increased  in  a  ratio 
that  far  exceeds  the  growth  of  the  population.  (5)  The  enormous 
difi'erence  between  rich  and  poor  has  been  diminished  and  th<< 
middle  class  of  prosperous  and  intelligent  people  has  gained 
greatly  in  number.  (6)  The  development  of  home  industry 
has  not  been  effected  at  the  expense  of  that  unhappy  victim  of 
tariff  legislation,  "  the  consumer."  Even  the  small  class  of 
consumers,  who  are  not  also — directly  or  indirectly — producers, 
find  their  profit  in  it.  As  Dr.  Bowring  shows,  the  home  mar- 
ket is  supplied  with  better  and  cheaper  goods  than  England 
could  furnish,  and  Prussia  is  now  competing  for  the  possession 
of  even  the  English  markets. 

"  The  Zollverein,  according  to  the  census  of  1867,  comprises  a  territory 
of  more  than  90,000  geographical  square  miles,  with  a  population  c  )mpute(i 


328  ELEMENTS    OF   POLITICAL   ECONOMY. 

»t  over  thirty-eight  millions.  Since  the  realization  of  commercial  freedom" 
between  the  parts  of  the  empire,  "  German  industry  has  increased  in  an  un- 
precedented degree,  and,  to  a  certain  extent,  competes  successfully  with 
that  of  Great  Britain.  The  character  of  the  foreign  commerce  of  Germany 
has  entirely  changed.  Instead  of  exporting  raw  materials  only,  she  sends 
out  the  products  of  her  own  manufacturing  industry,  creating  a  market 
abroad  which  keeps  her  actively  employed  at  home.  The  German  wool- 
len manufacture  has  recovered  the  ground  lost  in  the  middle  ages,  and 
its  fabrics  at  present  form  the  chief  part  of  the  Zollverein  exports.  The 
manufacture  of  cotton  and  silk  has  made  equal  progress,  although  the 
materials  have  to  be  imported.  The  linen  trade  has  not  yet  began  to 
bompete  with  that  of  England,  but  in  steel  and  iron  goods,  in  glass, 
paper  and  silk  manufactures,  in  pottery,  stoneware  and  porcelain,  in 
chemicals,  in  the  refining  of  sugar  and  beer,  Germany  abundantly  sup- 
plies her  own  wants,  and  yet  reserves  a  surplus  for  foreign  interchange  " 
(Yeates's  Recent  and  Existing  Commerce — Free  Trader).  The  linen  trade, 
also,  has  become  of  importance,  in  later  years. 

(7)  Jhe  Grerman  people,  once  dissevered  by  the  frontiers  of 
petty  principalities,  have  been  mightily  drawn  into  national  and 
political  unity  by  the  industrial  policy  that  recognised  the  iden- 
tity of  the  material  interests  of  these  severed  parts.  It  was  the 
Zollverein  that  made  the  ideal  of  German  unity  popular,  though 
it  did  not  originate  it.  It  was  the  public  sentiment  thus  created 
that  enabled  Prussia  in  1866  and  1870  to  put  herself  at  the 
head  of  a  united  Germany,  and  reduce  the  petty  sovereigns  of 
the  country  to  the  rank  of  a  landed  aristocracy.  It  was,  as 
Mr.  Laing  points  out,  the  same  growth  of  public  sentiment  in 
power  and  control  over  the  government,  that  compelled  Prussia 
to  replace  her  autocratic  institutions  by  a  representative  system, 
in  which  the  popular  will  finds  a  free  and  regular  expression. 
Since  that  time,  Dr.  Bowring  tells  us  in  1840  ''  the  sentiment  of 
German  unity  has  been  brought  out  of  the  regions  of  hope  and 
fancy  into  those  of  the  positive  and  material  interests.''  "  G-er- 
many  in  the  course  of  ten  years,"  says  List  in  1841,  "  has  ad- 
vanced a  century  in  prosperity  and  industry,  in  national  self- 
respect  and  power.''  "  The  German  people,"  says  Mr.  S.  Laing 
in  1842,  "  are  for  the  first  time  united  in  one  great  object  of  ma- 
terial interest;  .  .  .  and  for  the  first  time  they  have  made  the 
influence  of  public  opinion  an  effective  state  power  in  their  in- 


THE   ZOLLVEREIN   AND   THE   UNITY  OP   GERMANY.    329 

ternal  affairs.  .  .  .  The  German  commercial  league  is,  in  its  re- 
sult, the  most  important  and  interesting  event  of  this  half  cen- 
tury." "  Their  exaggerated  expectations  are  that  Germany  is 
to  run  the  same  career  as  England ;  to  attain  the  same  national 
wealth  ;  to  force  or  persuade  Holland,  Belgium,  Hanover,  Ham- 
burg, Denmark,  to  become  members  of  the  league;  to  exclude 
all  but  their  own  goods  and  manufactures  from  the  Continent ; 
to  become  an  acknowledged  political  power;  to  have  a  common 
flag,  common  revenues;  to  have  fleets,  armies,  colonies,  and  to 
be  a  great  naval  power  on  the  ocean."  "  According  to  every 
true  German,  the  league  is  to  be  the  grand  restorer  of  nationality 
to  Germany,  of  national  character,  of  national  mind,  national 
greatness,  national  everything  to  a  new,  regenerated  German 
nation.  They  are  to  spin  and  weave  themselves  into  national 
spirit,  patriotism,  and  united  efi'ort  as  a  great  people." 

In  1864  Prussia,  following  the  example  of  France,  reduced  her 
tariff  from  a  protectionist  to  a  revenue  basis.  The  competition 
thus  challenged  proved  most  disastrous  to  many  of  the  great  in- 
dustries which  had  been  developed  by  the  earlier  protective  policy 
of  the  Zollverein.  In  1879,  after  making  full  proof  of  what  free 
trade  could  do  for  Germany,  the  protective  policy  was  restored  again. 

§  289.  (3)  Russia  became  a  European  power  in  the  time  of 
Peter  the  Great.  He  and  some  of  his  successors — notably 
Catharine  II. — labored  to  foster  industry  by  their  patronage, 
but  as  the  people  were  too  unskilful,  it  was  largely  by  the  im- 
portation of  foreign  artisans.  The  merchants  being  mostly  Old 
Believers  (or  Raskolniks)  did  their  utmost  to  keep  foreign  manu- 
factures out  of  holy  Russia,  but  large  quantities  were  brought 
in,  especially  from  the  Leipsic  fairs.  The  peace  of  Tilsit  in- 
cluded Russia  in  the  Continental  System,  until  the  war  broke  out 
again  in  1812.  At  the  return  of  peace  and  the  restoration  of 
ordinary  relations  with  Western  Europe,  Russia  had  an  extra- 
ordinary season  of  prosperity.  The  failure  of  the  crops  in  the 
West  made  a  great  demand  for  her  grain,  and  money  flowed  into 
the  country.  Under  the  influence  of  Storch,  a  Russian  disciple 
of  Adam  Smith,  the  Emperor  Alexander  adopted  the  free  trade 


330  ELEMENTS   OF   POLITICAL   ECONOMY. 

policy.  The  ruin  of  a  great  part  of  the  Russian  manufactures 
speedily  followed.  ^'  It  is  only  the  first  shock  of  free  competi- 
tion/' said  the  theorists  ;  "  wait  a  little  and  you  will  see  the  tide 
turn."  But  the  tide  did  not  turn ;  England  shut  out  Russian 
corn  to  protect  her  own  farmers,  and  the  ruin  grew  worse.  Count 
Nesselrode  came  to  the  conclusion  that  Russia  must  keep  her- 
self In  a  ministerial  circular  of  1821,  he  says:  "Russia  sees 
herself  compelled  by  circumstances  to  adopt  an  independent  in- 
dustrial system  ;  the  products  of  the  empire  find  no  access  to 
foreign  markets  ;  domestic  manufactures  are  either  ruined  or 
on  the  point  of  ruin  ;  all  the  moneys  of  the  empire  flow  abroad  ; 
and  the  most  solid  business  houses  are  on  the  brink  of  fail- 
ure." The  tariff's  of  1820  and  1822  put  an  end  to  this  period 
of  dependence,  when,  as  Mr.  Cobden  told  his  countrymen,  a  ces- 
sation of  English  exports  would  have  the  effect  "  to  doom  a  por- 
tion of  her  "  Russia's  "  people  to  absolute  nakedness."  Since 
that  date  every  year  has  seen  great  industrial  advances.  "  In  no 
country  in  Europe  has  the  march  of  civilization  and  progress 
in  modern  times  been  more  rapid,  decided  and  systematic;"  all 
this  "  having  been  effected  by  the  energy  and  wisdom  of  a  few 
master  minds."  "  The  manufacturing  industry  is  not  yet  fifty 
years  old.  It  required  nursing  under  a  system  of  protection, 
but  is  now  so  far  developed  as  to  admit  a  great  deal  of  competi- 
tion "  (Barry's  Russia  in  1870). 

The  cotton  nmnufacture  doubled  in  a  few  years  after  the 
tariff;  its  products  are  now  worth  $125,000,000.  At  first  it  im- 
ported four-fifths  of  the  thread  used  ;  but  since  England  re- 
moved her  prohibition  on  the  export  of  spinning-machinery,  the 
proportion  has  changed,  and  only  one-sixteenth  of  the  yarn  used 
is  imported.  The  amount  is  seven  times  what  it  was  in  1822, 
and  employs  175,000  people.  Native  cottons  have  driven  the  im- 
ported out  of  the  great  Russian  fairs,  and  the  export  is  much 
greater  than  the  import.  They  are  "capital  in  quality  and  neat 
in  design  ;  far  prettier  and  neater,  I  think,  than  our  own " 
(Harry).  Since  1830  the  silk  manufacture  has  been  protected, 
ind  two-thirds  of  the  silks  used  are  now  made   at   home,  and 


RUSSIAN  MANUFACTURES   AS   THEY  ARE.  331 

compete  in  excellence  with  any  foreign  goods,  while,  like  all 
home-ni.-vde  Russian  fabrics,  they  are  much  better  adapted  to 
the  popular  taste.  .  .  There  are  also  800  woollen  factories,  em- 
ploying 110,000  workmen  and  making  goods  of  the  value  of 
$50,000,000  annually.  The  absence  of  large  capital,  the  lack 
of  popular  education,  the  low  grade  of  intelligence,  the  large 
use — as  in  Germany — of  fabrics  spun  and  woven  in  the  house- 
holds, all  tend  to  keep  back  Russian  manufactures;  the  Russian 
workman  does  as  he  is  bid,  or  as  he  sees  others  do,  but  cannot 
be  left  with  any  range  of  responsibility.  Rut  the  people  are 
making  large  advances,  especially  since  the  emancipation  of  the 
serfs,  and  in  the  absence  of  other  teachers,  the  discipline  and 
the  work  of  the  factory  is  of  itself  sharpening  their  faculties  and 
quickening  their  perceptive  powers.  The  somewhat  lower  tariff 
of  1869  imposes  duties  of  at  least  thirty-five  per  cent,  on  foreign 
manufactures.  "  Everything  is  now  done  to  stimulate  trade ; 
every  inducement  held  out  to  encourage  manufactures  ;  factories 
are  springing  up  fitted  with  native-made  machinery.  Rranches  of 
industry  are  started,  which  before  were  thought  to  be  impossible 
for  Russian  ingenuity  to  master,  and  trade  flourishes  as  it  never 
flourished  before.  Ever  since  the  Crimean  war  the  amount  of 
interchange  of  commodities  has  been  increasing"  (Rarry). 

§  290.  Sweden  began  to  develop  her  manufactures  by  protec- 
tion in  the  time  of  the  great  Gustavus  Adolphus.  During  the 
later  Middle  Ages  the  country  was  kept  in  a  state  of  poverty 
through  the  oppressions  of  the  Hanseatic  League  and  the  back- 
wardness of  its  people.  Even  after  its  emancipation  from  the 
Danish  rule  it  formed  no  higher  ambition  than  to  export  raw 
materials  in  exchange  for  the  small  quantity  of  manufactured 
goods  this  commerce  could  afford  her  people.  Gustavus  formed 
and  executed  the  purpose  to  make  his  kingdom  a  manufacturing 
country.  His  protective  policy  has  been  maintained  from  that 
day  to  this,  with  great  results  to  the  kingdom.  The  first  and 
only  departure  from  it  was  in  1845.  Sweden  was  alnjost  the  only 
country  that  responded  to  the  proposal — reciprocity  as  to  naviga- 
tion laws — made  by  England.     English  authority  describes  her 


332  ELEMENTS    OF   POLITICAL   ECONOMY. 

present  tariff  on  goods  as  "having  the  unfortunate  distinction 
of  disputing  with  Spain  the  debatable  honor  of  being  the  high- 
est in  the  world,  the  Russian  only  excepted."  Till  1824  the 
prohibition  policy  was  followed,  under  •'  a  more  liberal  but  tho- 
roughly protective  (tres-protecteur)  system,"  her  manufactures 
were  more  than  trebled  in  thirty  years,  and  her  agriculture  so 
much  improved  that  she  now  has  large  quantities  of  grain  for 
export,  instead  of  depending,  as  was  once  the  case,  upon  the 
granaries  of  Finland. 

La  SuMe  et  son  Commerce,  par  le  Baron  Knut  Bonde ;  Paris,  1852. 

(5)  Denmark  is  and  was  a  protectionist  country.  "  She 
stands  alone  in  her  corner  of  the  world,  exchanging  her  loaf  of 
bread,  which  she  can  spare,  for  articles  she  cannot  provide  for 
herself,  but  still  providing  for  herself  everything  she  can  by  her 
own  industry.  .  .  .  This  home  industry  of  hers  is  protected  by 
heavy  import  duties  on  all  foreign  articles  which  could  compete 
with  her  own  manufactures;  and  these  are  avowedly  imposed, 
not  for  revenue,  while  a  lower  duty  would  be  more  productive, 
but  for  protection.  .  .  .  The  object  is  simply  to  secure  a  living 
to  that  portion  of  the  population  which  is  not  engaged  in  hus- 
bandry, and  which,  without  protective  duties  on  all  that  inter- 
feres with  their  branches  of  industry,  would  become  a  burden 
on  the  rest  of  the  community." 

See  S.  Laing's  Denmark  and  the  Duchies  ;  London,  1852. 

§  291.  (6)  Spain  was  one  of  the  first  to  adopt  the  prohibitory 
system,  and  that  by  which  revenue  was  raised  by  duties  on  the 
commerce  between  the  different  provinces  of  the  kingdom ;  she 
was  also  one  of  the  last  to  give  these  up.  The  system  was  often 
as  ruinous  to  home  industry  as  it  was  meddlesome  ;  thus  in  1720 
she  adopted  a  tariff  which  was  ingeniously  mischievous.  "  Its 
provisions  discriminated  against  the  export  of  Spanish  goods  to 
the  colonies,  and  in  favor  of  foreign  manufactures  and  of  con- 
traband trade.  The  industry  of  the  nation,  arrested  first  of  all 
by  the  competition  of  Italy  and  the  Low  Countries,  afterwards 
by  that  of  England  and  France,  ceased  its  development.  It  re- 
mained backward  it  was  paralyzed,  while  the  other  countries  by 


SPANISH   TARIFFS.  333 

means  of  Cadiz  carried  on  the  commerce  of  its  colonial  pos- 
sessions, and  drew  from  them  the  raw  materials  and  the  precious 
metals  which  they  produced.  The  tariff  of  1778  which  im- 
posed heavy  duties  upon  goods  produced  abroad  came  too  late; 
the  mischief  was  accomplished,  and  the  industry  of  Spain  was 
all  but  annihilated  ''  (J.  F.  Constant).  It  had  no  time  to  rally 
before  the  Napoleonic  wars  completed  her  misery.  She  has 
suffered  more  this  century  than  any  other  country  from  internal 
discord  and  civil  war.  The  country  is  rich  in  the  elements  of 
material  wealth,  but  poor  in  population,  being  next  to  Scandinavia 
and  Russia  in  the  sparseness  of  population.  The  first  really 
national  and  simply  protective  tariff  was  adopted  in  1845 ;  it 
abolished  all  provincial  tariffs  and  most  of  the  prohibitions,  and 
reduced  the  duties  on  a  good  many  articles  without  in  the  least 
giving  up  the  principle  of  protection.  That  Spain  has  advanced 
rapidly  in  industrial  development  during  the  thirty  years  that 
have  elapsed  is  universally  conceded.  "  Progress,"  wrote  M 
Block  in  1850,  "  is  so  rapid  that  the  figures  of  to-day  are  left 
behind  to-morrow.  On  every  side  we  see  factories  and  workshops 
rising,  established  either  by  Spaniards  or  by  foreigners.  These 
latter  crowd  into  this  country  of  great  expectations,  where  so 
much  land  still  awaits  active  and  intelligent  occupants,  who 
bring  hither  their  talents  and  their  capital." 

See  L'Enpagne  en  1850,  Tableau  de  ses  Progren   lea  plus  receuta ;  par 
Maurice  Block.     Paris,  1851. 

The  new  tariff  of  1869  reduced  the  duties  on  a  great  number 
of  articles  without  giving  up,  either  in  fact  or  in  intention,  the 
principle  of  protection ;  after  its  adoption  the  revenue,  which 
had  fallen  off  since  1864,  considerably  increased.  The  destruc- 
tion of  the  French  vines  by  the  Phylloxera  insect  having  created 
a  great  demand  for  foreign  grape-juice  to  meet  the  demands  on 
the  French  wine-market,  the  Spanish  vine-growers  in  1882  voted 
to  sacrifice  Spanish  manufactures  to  their  French  rivals  in  ex- 
change for  concessions  which  would  give  them  advantages  over 
other  vine-growing  countries.  The  new  commercial  treaty  caused 
great  disturbances,  and  even  riots,  in  Catalonia. 


334  ELEMENTS   OF   POLITICAL    ECONOMY. 

§  292.  Two  European  countries  enjoy  the  unhappy  distinctioQ 
of  illustrating  the  miseries  inflicted  upon  nations  industrially 
weaker  when  they  engage  in  free  competition  with  those  that 
are  stronger. 

(1)  Portugal  in  1681  began  the  development  of  her  woollen 
manufactures,  the  Count  de  Ericeira  being  Prime  Minister  and 
author  of  this  policy.  "  Our  woollen  cloths,  cloth  serges  and 
cloth  druggetts,*'  says  the  old  British  Merchantman^  "were 
prohibited"  after  1684;  "they  set  up  fabrics  for  making  cloth, 
aod  proceeded  with  very  good  success,  and  we  might  justly 
apprehend  that  they  would  have  gone  on  to  erect  other  fab- 
rics, until  at  last  they  had  served  themselves  with  every  spe- 
cies of  woollen  goods/'  The  prohibition  not  extending  to  all 
woollen  fabrics,  but  only  to  those  most  in  use,  was  repeatedly 
evaded  by  making  goods  that  differed  from  these  only  in  some 
trifling  respect,  but  bore  names  invented  to  suit  the  Portuguese 
tariff".  At  last,  in  1703,  after  the  death  of  Ericeira,  Portugal 
negotiated  the  Methuen  Treaty  with  England,  by  which  Portu- 
guese wines  were  admitted  into  England  at  lower  rates  than 
those  of  France,  and  English  goods  into  Portugal  at  the  old 
rates  of  duty.  The  aristocracy,  who  were  large  wine-growers, 
were  chiefly  interested  in  the  new  arrangement.  "Their  own 
fabrics,"  says  the  British  Merchantman,  "were  perfectly  ruined, 
and  we  exported  £100,000  value  in  the  single  article  of  cloths 
the  very  year  after  the  treaty.  The  court  was  pestered  with 
remonstrances  from  their  manufacturers;  ....  but  the  thing 
was  passed,  the  treaty  was  ratified,  and  all  their  looms  were 
ruined."  One  of  the  first  eff"ects  was  such  a  drain  of  silver 
from  Portugal  that  "  there  was  left  very  little  for  their  neces- 
sary occasions,"  and  this  was  followed  by  a  drain  of  gold.  Ex- 
change stood  at  fifteen  per  cent,  against  Portugal,  and  her 
export  of  coin  to  England  rose  to  £1,500,000  a  year.  Goods 
were  not  paid  for  in  goods,  as  Free  Traders  allege. 

Her  people  were  reduced  to  the  .monotony  of  a  single  occupa- 
tion ;  the  amount  of  their  productive  labor  was  vastly  din.in- 
\shed;  their   power  of  association   and  mutual  helpfulness  was 


THE   RUIN   OF   TORTUOAL.  335 

destrcyed.  The  difference  between  the  price  of  their  raw  pro- 
duce and  the  manufactured  goods  for  which  they  exchanged 
them,  increased  as  the  workshop  was  carried  away  from  the 
neighborhood  of  farm  and  vineyard.  The  aristocracy  of  land- 
owners found  that  they  had  been  killing  the  goose  that  laid  the 
gfolden  eggs,  for  though,  as  there  was  no  occupation  but  farming, 
the  people  were  competing  for  the  possession  of  land,  the  rents 
that  they  were  able  to  pay  were  much  less  than  if  a  varied  in- 
dustry had  furnished  a  home  market  by  withdrawing  a  large  part 
of  the  people  from  agriculture.  One  new  industry  was  created — 
smuggling.  "  We  do  not  deny,"  says  Mr.  Macgregor  in  his 
Commercial  Statistics,  "  that  there  were  advantages  in  having  a 
market  for  our  woollens  in  Portugal,  especially  one  of  which,  if 
not  the  principal,  was  the  means  afforded  of  sending  them  after- 
ward, by  contraband  trade,  into  Spain.''  As  to  her  legitimate 
commerce,  Mr.  McCullough  says  that  the  tonnage  of  her  ship- 
ping is  about  one-thirtieth  of  what  it  was,  and  that  her  produce 
is  mostly  carried  in  foreign  ships.  Every  year  saw  a  decline  of 
the  nation  in  wealth,  civilization,  power  and  prestige.  Her  peo- 
ple retrograded  in  intelligence  and  skill.  "  It  is  surprising," 
says  an  English  traveller,  "  how  ignorant,  or,  at  least,  superfi- 
cially acquainted,  the  Portuguese  are  with  every  kind  of  handi- 
craft; a  carpenter  is  awkward  and  clumsy,  spoiling  every  work 
he  attempts,  and  the  way  in  which  the  doors  and  woodwork, 
even  of  good  houses,  are  finished,  would  have  suited  the  rudest 
ages.  Their  carriages,  of  all  kinds,  from  the  fidalgo's  family 
coach  to  the  peasant's  market  cart,  their  agricultural  imple- 
ments^ locks  and  keys,  &c.,  are  ludicrously  bad.  Tiiey  seem  to 
disdain  improvement,  and  are  so  infinitely  below  par,  so  stri- 
kingly inferior  to  the  rest  of  Europe,  as  to  form  a  sort  of  dis- 
graceful wonder  in  the  middle  of  the  nineteenth  century'' 
(Bailly).  "The  finances,"  says  the  Anmuiire  dc  V Economie 
'Politique  for  1849,  '*  are  in  the  most  deplorable  condition  ;  the 
treasury  is  dry,  and  all  branches  of  the  public  s«  f/ice  suffer.  A 
carelessness  and  a  mutual  apathy  reign  through rj.  the  govern- 
ment and  the  nation." 


336  ELEMENTS    OF   POLITICAL   ECONOMY. 

Nor  has  England  gained  as  much  as  Portugal  has  lost ;  the 
country  is  too  poor  to  be  a  good  customer.  The  Portuguese  de- 
mand for  English  goods  is  now  of  no  importance,  and  has  no 
effect  on  the  English  market.  The  country  is  a  sucked  orange, 
a  thing  to  be  got  rid  of — "  a  burden  and  a  curse  to  England," 
Mr.  Cobden  says. 

After  the  defeat  of  the  Church  party  and  its  leader  Don 
Miguel,  a  protective  tariff  was  adopted  in  1837,  and  its  rate  of 
duties  increased  in  1841.  It  has  the  merit  of  being  "  specific" 
in  its  method,  so  that  its  rates  fall  most  heavily  upon  the  com- 
moner and  cheaper  articles.  But  in  a  country  so  demoralized 
by  contraband  trade,  so  stripped  of  all  the  elements  of  industrial 
wealth,  so  bereft  of  skill  and  enterprise,  it  can  only  operate 
slowly  in  retrieving  the  fortunes  of  Portuguese  industry.  Still  it 
has  made  a  change.  It  has  turned  the  balance  of  trade  with 
England  in  Portugal's  favor,  and  already  "  manufactures  of 
woollen  and  cotton  goods,  paper  and  tobacco,  employ  many  per- 
sons in  Lisbon,  and  the  printing  of  cotton  goods  imported  from 
England,  has  nearly  put  a  stop  to  the  trade  in  English  printed 
goods"   (Dr.  Yeates). 

§  293.  Turkey,  Mr.  Cobden  thinks,  is  also  "  a  burden  and  a 
curse  "  to  the  commercially  powerful  nation  with  whom  she  has 
long  enjoyed  free  trade.  Turkey  was  once  a  burden  to  nobody ; 
was  one  of  the  chief  commercial  nations  of  the  world.  "  Greece 
and  Asia  Minor  furnished  us  with  their  manufactured  products, 
together  with  those  of  India,  long  after  their  conquest  by  the 
Turks,  and  up  to  the  period  when  the  industry  of  Europe  reached 
its  development.  To-day  their  manufactures  have  all  but  dis- 
appeared, and  those  unhappy  countries  have  nothing  but  farm 
products "  (Constant).  When  the  power-loom  superseded  the 
han.'i-V.om  in  Western  Europe,  there  was  an  immense  importa- 
ti.i:  J  British  goods.  The  muslins,  the  ginghams  and  the 
carpets  that  for  centuries  had  commanded  the  markets  of  the 
world,  that  fifty  years  ago  were  worn  in  the  backwoods  of  America, 
were  driven  out  of  their  own  home  markets.  "  Although,"  says 
McCulloch,  "  our  muslins  and  chintzes  be  inferior  in  fineness  to 


THE   RUIN   OP  TURKEY.  337 

those  of  the  East,  and  our  red-dye  be  inferior  in  brilliancy,  those 
defects  are  more  than  balanced  by  the  greater  cheapness  of  our 
goods  J  and  from  Smyrna  to  Canton,  from  Madras  to  Samarcand, 
we  are  everywhere  supplanting  the  native  fabrics."  Turkish 
carpets  are  still  unequalled  by  the  Western  fabrics,  but  the 
latter  have  driven  them  out  of  the  market.  "  Of  six  hundred 
looms  for  muslins  in  Scutari  in  1812,  only  forty  remained  in 
1831 ;  and  of  two  thousand  weaving  establishments  in  Tournovo, 
there  were  only  two  hundred  "  left. 

Under  any  financial  system,  short  of  enforced  prohibition  of 
foreign  manufactures,  these  Eastern  industries  would  have  had 
a  severe  struggle,  but  would  most  probably  have  survived  it. 
Protection  might  have  been  the  means  of  importing  foreign 
skill,  and  perhaps,  in  spite  of  English  prohibition,  the  necessary 
machinery.  But  the  Turkish  merchants  had  all  the  odds  against 
them.  In  the  absence  of  a  sufficient  revenue  from  customs' 
duties,  and  of  direct  taxation,  the  native  industry  of  the  country 
was  severely  taxed.  Taxes  on  trades,  taxes  on  tools,  taxes  on 
every  sort  of  raw  material,  taxes  on  every  kind  of  home-made 
fabric,  licenses  and  monopolies,  all  were  laid  upon  the  workman 
at  home,  while  his  competitor  from  abroad  paid  the  merest  trifle 
in  customs'  duties,  and,  by  special  treaties  with  France  and  Eng- 
land, even  that  was  reduced  from  five  to  three  per  cent,  ad 
valorem,  in  consideration  of  the  exemption  of  Turkish  vessels 
from  certain  harbor  duties.     Native  exports  pay  twelve  per  cent. 

For  a  time  there  was  left  to  Turkey  a  lifeless  trade  in  raw  silk, 
cotton  and  the  like.  Now  even  that  is  gone  to  countries  less 
burdened  with  taxation.  "  Ships  carrying  goods  to  Constanti- 
nople either  return  in  ballast,  or  get  cargoes  at  Smyrna,  Odessa, 
&c."  Only  a  few  of  the  ruder  manufactures  are  still  carried  on  ; 
a  woman's  labor  is  worth  four  cents  a  dayj  a  man's  will  com- 
mand as  much  as  fifty  cents  a  week  in  the  seaports. 

"  The  provincial  populations,  though  not  devoid  of  capacity 
for  better  things,  are  at  present  condemned  to  wither  under  a 
general  atmosphere  of  maladministration  and  decay.  .  .  .  Beg- 
gars all,  beggars  all,  marry,  good  sir;  little  doing,  less  likely 
22 


338  ELEMENTS    OF   POLITICAL   ECONOMY. 

to  be  done;  trade  degenerated  into  pedlary,  enterprise  into 
swindling,  banking  into  usury,  policy  into  intrigue,  lands  un- 
tilled,  forests  wasted,  mineral  treasures  unexplored,  roads,  har- 
bors, bridges,  every  class  of  public  works  utterly  neglected  and 
falling  into  ruin,  pastoral  life  with  nothing  of  the  Abel  about 
it,  agriculture  that  Cain  himself,  and  metallurgy  that  his  work- 
man-son might  have  been  ashamed  of  j  in  public  life,  universal 
venality  and  corruption;  in  social  life,  ignorance  and  bigotry; 
and  in  private  life,  immorality  of  every  kind  ;  not  '  something,' 
but  everything  'rotten  in  the  state  of  Turkey.  Such  is  the 
picture  "  drawn  by  Dr.  Lennep.  "  We  may  add  that  it  is  hardly 
an  overdrawn  one." 

See  for  this  and  the  quotations  that  follow,  the  article  "  Provincial 
Turkey,"  in  the  London  Quarterly  Bevieto  for  October,  1874. 

Yet  the  fault  is  not  in  the  country  or  the  people ;  for  the 
Turks  are  "  as  a  rule  industrious,  simple,  thrifty,  ingenious  too, 
peaceable  and  orderly;"  as  free  from  the  grosser  and  worser 
forms  of  vice  and  crime  as  any  nation  under  the  sun.  "  That  they 
enjoy  a  climate  than  which  few  are  more  favorable  to  labor  and 
produce ;  that  the  soil  is  almost  everywhere  fertile  above,  and 
rich  in  valuable  ores  below;  that  the  coast  abounds  in  places  of 
shelter,  and  the  inland  with  noble  rivers,  are  facts  which  no  one 
will  question.  Yet  it  is  no  less  certain  that  capital  has  van- 
ished from  the  land,  that  every  undertaking,  every  enterprise, 
is  surely  smitten  with  failure ;  that  the  social  condition  is  dete- 
riorating in  every  respect,  the  number  of  the  inhabitants  dimin 
ishing,  and  that  the  symptoms  precursive  of  a  general  bank- 
ruptcy, not  of  means  and  finances  only,  but  of  vitality  and  of 
men,  become  more  menacing  year  by  year,  almost  day  by  day." 

And  at  the  bottom  of  all  the  mischief  lies  the  impoverishment 
of  the  people  through  a  bad  national  economy.  "  Want  of 
capital  is  the  head  and  front  of  Turkey's  ills  throughout  her 
length  and  breadth  at  the  present  day ;  want  of  men,  the  ne- 
cessary correlative  or  result  of  the  former,  the  second."  No- 
thing is  left  her  but  agriculture,  and  such  an  agriculture  !  ''  All 
'jp  the  sides  of  the  green  hill  "  upon  which  a  Turkish  governor's 


THE   DECAY   OF  TURKISH    INDUSTRIES.  339 

palace  is  perched,  "  far  over  the  wide  Asiatic  plain,  we  see  the 
yet  uneffaced  traces  of  irrigation  channels,  noT!»  broken  down 
and  dry ;  while  removed  from  their  original  places,  and  strewed 
at  random  over  the  ground  here  and  there,  lie  the  boundary 
stones  that  once  marked  the  limits  of  fields  since  abandoned  to 
weed  and  bush.  At  forty  per  cent,  taxation,  and  such  is  the 
very  lowest  rate  levied  by  the  Stamboulee  tithe-gatherers  on 
the  Turkish — if  the  crop  be  bad,  the  percentage  may  amount  to 
something  much  higher — agriculture  is  not  a  paying  business; 
and  such  luxuries  as  irrigation,  drainage,  manure,  and  improve- 
ments of  any  kind,  are  out  of  the  question.  The  landowner, 
impoverished  and  in  debt,  cannot  make  them ;  the  government 
has  very  different  uses  for  the  money  it  takes  from  them,  and 
will  not." 

"Another  blight  overspreads  the  land  as  pestilence  follows 
famine.     What   the   tax-gatherer   has   left   is  gleaned   by  the 
usurer.  .  .  There  exists  even  now  no  credit-system  in  Turkey, 
no  country  bank,  no  means  of  obtaining  an  advance  except  by 
private  loans;  no  investment  except  in  such  loans;  no  limit  to 
the  terms,  no  security  on  the  payment."     With  the  destruction 
of  capital  through  the  paralysis  of  societary  circulation,  and  the 
drain  of  money  abroad,  the  destruction  of  credit  has  gone  on 
pari  passu.     There  are  a  few  banks  in  the  seaport  towns,  but  as 
their   transactions   are  chiefly  the   negotiation   of  government 
loans  and  speculations  with  foreign  or  mixed  companies,  they 
tend  "  to  draw  off  the  wealth  of  the  Empire,  not  to  husband  it; 
they  are  not  reservoirs,  but  drains.     The  peasant,  pressed  by  the 
claims  of  the  tax-gatherer,  the  landowner  in  need  of  money  for 
improvements,  the  shopkeeper  desirous  of  outfit,  the  artisan  who 
would  set  up  or  extend  his  workshops,  are  one  and   all  driven 
into  the  hands  of  the  private  lender.  .  .  The  unfortunate  peasant 
is   thus  ground  as  between  an  upper  and  a  nether  millstone. 
Three  per  cent,  a  month  is  the  ordinary  rate  of  interest;  and 
this,  if  unpaid,  is  at  the  end  of  the  year  added  to  the  principal. 
The  day  of  selling  out  soon   comes ;  the  family  emigrates   or 
starves.     We  have  known  a  single  money-lender  thus  draw  to 


340  ELEMENTS    OF   POLITICAL   ECONOMY. 

himself  the  substance  of  a  whole  district.  Another  evil  that 
naturally  follows  is  that  capital  wherever  it  exists  is  certain  to 
be  applied  almost  exclusively  to  loans  of  this  nature,  while  for 
productive  investment  scarce  a  farthing  can  be  found.  A  profit 
of  thirty-six  per  cent,  is  sure,  particularly  with  the  Asiatics,  to 
be  preferred  to  one  of  four  or  five  per  cent,  though  more  solid 
and  made  by  honester  means,  such  as  mining,  agriculture,  and 
the  like.  Hence,  too,  every  work  of  public  utility  is  thrown 
into  the  hands  of  foreigners;  foreign  capitalists  construct 
harbors,  work  mines,  utilize  forests,  lay  down  railroads,  or  at 
least  organize  companies  which  profess  to  do  all  these  things; 
while  the  profits,  if  any,  are  shared  among  foreigners  and  outside 
the  country.  .  .  Lastly,  whatever  home-made  capital  still  remains 
in  the  territory  is  unavoidably,  by  the  very  universality  of  small 
private  loans,  so  broken  up  and  subdivided  as  to  become  prac- 
tically useless  for  any  serious  purpose.  Of  all  the  sinister  in- 
fluences at  work  within  the  empire,  none  is  more  directly 
destructive  of  its  internal  prosperity,  and,  above  all,  of  its  agri- 
cultural and  landed  well-being,  than  this.  'Not  a  single 
property,  great  or  small,  within  this  district,  but  is  burdened  to 
my  certain  knowledge  with  obligations  and  liabilities  exceeding 
the  value  of  its  possible  produce  for  two  generations  to  come,' 
said  a  Turkish  provincial  governor." 

The  outside  world  is  continually  deceived  by  a  show  and  pre- 
tence of  reform,  but  these  go  no  deeper  than  the  surface.  Things 
are  growing  worse,  not  better.  "  The  administration  is  more 
corrupt  than  ever,  justice  more  venal,  popular  education  more 
neglected,  taxation  much  heavier,  and  the  population  at  large 
more  impoverished  and  dwindling  than  in  any  preceding  epoch. 
.  .  .  When  the  mines  of  Anatolia  are  worked,  the  manufactures 
of  Syria  encouraged,  the  dikes  of  the  Tigris  valley  restored; 
when  the  bridges,  roads,  quays,  embankments,  canals,  reservoirs, 
caravanseries,  all  that  was  the  pride  and  profit  of  local  govern- 
ments, and  is  now  perishing  or  has  perished  with  them,  are  re- 
paired and  perfected, — then  indeed  will  there  be  hope  for  the 
government  and  the  governed,  for  Turkey  and  her  Sultan." 


OUR   COLONIAL   HISTORY.  341 

Hand-in  hand  with  the  destruction  of  local  centres  of  industry, 
with  the  lowering  of  the  people  to  the  level  of  a  single  employ- 
ment, and  with  the  effaceuient  of  the  freedom  and  individuality 
of  character  that  accompany  diversified  employment,  has  gone  a 
parallel  political  revolution  that  closely  corresponds  to  the 
economic  one.  "  From  a  confederacy  of  half-independent  states, 
each  retaining  in  the  main  its  own  customs,  privileges  and  insti- 
tutions, guaranteed  by  a  strength  to  defend  them,  and  by  a 
rough  but  efficacious  popular  representation,  Turkey  has  within 
the  last  fifty  years  sunk  into  an  absolute,  uncontrolled,  central- 
ized despotism,  under  which  every  former  privilege,  institution, 
custom,  popular  representation — in  a  word,  every  vestige  of 
popular  freedom  and  local  autonomy — has  been  merged  and  lost 
in  one  blind  centralized  uniformity."  "  She  has  sacrificed  an 
empire  to  a  capital/^  And  the  decline  of  military  power  has 
followed  that  of  industry.  ''  Whoever  lists  may  now  assail  the 
provinces  with  the  safe  assurance  that  the  regular  troops  once 
overcome  no  further  opposition  will  remain  ;  the  people  starved, 
disheartened,  disarmed,  and  thoroughly  alienated  at  heart  from 
a  government  that  is  a  mere  synonym  for  fiscal  extortion,  that 
takes  all  and  gives  nothing,  that  has  forgotten  the  traditions  of 
its  youth,  and  preferred  the  office  of  tax-collector  to  that  of 
leader,  will  offer  no  resistance.'' 

§294.  The  history  of  American  industry  may  be  said  to  begin 
with  the  independence  of  the  nation,  or  rather  with  the  adop- 
tion of  the  present  Constitution.  The  navigation  laws  confined 
the  carrying  trade  of  the  colonies  to  English  or  colonial  vessels. 
In  1672  duties  were  imposed  upon  goods  carried  from  one  Brit- 
ish colony  to  another,  and  as  the  West  Indies  at  that  time  sup- 
plied us  with  sugar,  cotton,  tobacco  and  indigo,  took  timber, 
grain,  &c.,  in  exchange,  the  trade  thus  taxed  for  the  benefit  of 
the  English  treasury  was  an  extensive  one. 

During  the  last  century  the  tendency  of  the  colonies  to  unite 
manufactures  with  their  agriculture  and  save  the  expense  of 
transportation  of  the  raw  produce  they  sold  and  the  manufac- 
tured goods  they  imported,  was  sternly  repressed  by  English 


342  ELEMENTS   OF   POLITICAL   ECONOMi". 

legislation.  They  saw,  as  Franklin  wrote  from  London  in  1771 
that  "  every  manufacturer  in  our  country  makes  part  of  a  market 
for  provisions  within  ourselves,  and  saves  so  much  money  to  the 
country  as  must  otherwise  be  exported  to  pay  for  the  manufac- 
tures he  supplies.  Herein  England  it  is  well  known  and  under- 
stood that  wherever  a  manufacture  is  established  which  employs 
a  number  of  hands,  it  raises  the  value  of  land  in  the  neighbor- 
ing country  all  around.  It  seems,  therefore,  the  interest  of  our 
farmers  and  owners  of  land  to  encourage  young  manufactures  in 
preference  to  foreign  ones." 

In  1699  the  export  of  wool  and  woollens  from  the  colonies,  as 
well  as  from  Ireland,  was  forbidden.  In  1731  an  inquiry  of  the 
Board  of  Trade  ascertained  that  the  colonies  were  making  linens, 
woollens,  iron-wares,  paper,  hats  and  leather,  and  even  export- 
ing hats.  The  carriage  of  these,  even  from  one  "  plantation  "  or 
colony  to  another, was  forbidden.  In  1750  the  preparation  of 
iron,  except  in  its  rudest  form  for  export  to  England,  was  pro- 
hibited; and  every  slitting  or  rolling  mill,  tilt-hammer,  forge  or 
steel  furnace  was  declared  "  a  common  nuisance."  The  making 
of  pig  iron  was  allowed,  because,  the  application  of  coal  to  its 
manufacture  being  as  yet  not  invented,  and  the  American  woods 
furnishing  an  unlimited  supply  of  charcoal,  it  was  thought  good 
policy  to  encourage  the  colonies  in  this  line.  The  law  was  very 
commonly  evaded,  as  the  ruins  of  the  old  steel  furnaces  and  iron 
works  in  out-of-the-way  places  of  New  Jersey  and  other  states 
Btill  show. 

The  economical  theories  which  underlay  this  British  policy  will  be  found 
in  a  standard  work  of  that  period — Geo  On  Trade,  (London,  1750).  "  Our 
colonies,"  he  says,  "  are  much  in  the  same  state  that  Ireland  was  in  when 
they,"  the  Irish,  "  began  the  woollen  manufactory,  and,  as  their  numbers 
increase,  will  fall  upon  manufactures  for  themselves.  A  little  regulation 
would  remove  all  this  out  of  the  way,  It  is  proposed  that  no  weaver 
have  liberty  to  set  up  any  looms  without  first  registering  the  name  and 
abode  of  any  journeyman  that  shall  work  for  him;  that  all  negroes  shall 
be  prohibited  from  weaving  either  linen  or  woollen,  or  combing  of  wool, 
or  working  at  any  manufacture  of  iron,  further  than  making  it  into  pig 
or  bar  iron ;  they  shall  for  time  to  come  never  erect  the  manufacture  of 
uails,  under  the  size  of  a  two-shiiliug  nail,  horse-nails  excepted;  that  al) 


THE   REVOLUTION   AN   INDUSTRIAL    REVC  LT.         343 

Blitting-mills  and  engines  for  drawing  wire  or  weaving  stockings  be  put 
down;  that  also  they  bo  prohibited  from  manufacturing  hats,  stockings 
or  leather  of  any  kind.  ...  If  we  examine  into  the  circumstances  of 
the  inhabitants  of  our  plantations,  and  our  own,  it  will  appear  that  not 
one-fourth  part  of  their  pi-oducts  redounds  to  their  own  profit,  for  out  of 
all  that  comes  here,  they  only  carry  back  clothing  and  other  accommoda- 
tions for  their  families,  all  of  which  is  of  the  merchandise  and  manufac- 
ture of  this  kingdom.  .  .  .  All  these  advantages  we  receive  by  the 
plantations,  besides  the  mortgages  on  the  planters'  estates,  and  the  high 
interest  they  pay  us,  which  is  very  considerable ;  and  therefore  very  great 
care  ought  to  be  taken  that  they  are  not  put  under  too  many  difficulties, 
but  encouraged  to  go  pn  cheerfully.  .  .  .  The  colonies  have  not  commo- 
dities and  products  enough  to  send  us  in  return  for  purchasing  their 
necessary  clothing,  but  are  under  very  great  difficulties,  and  therefore  any 
ordinary  sort  sell  with  them,  and  when  they  have  grown  out  of  fashion 
with  us,  they  are  new-fashioned  enough  there." 

This  is  not  irony,  as  we  might  have  supposed  if  De  Foe  had  written 
it,  but  sober  earnest.  It  represents  the  unquestioned  English  opinion  of 
that  day.  Even  our  friend  Lord  Chatham  declared  in  the  same  spirit 
that  the  colonies  should  not  be  allowed  to  manufacture  "  so  much  as  a 
hob-nail "  for  themselves. 

§  295.  The  legislation  to  keep  tlie  colonies  to  the  work  of 
producing  raw  materials  for  English  manufacturers,  and  take  in 
pay  a  small  share  of  English  goods,  while  through  their  ne- 
cessities English  capital  became  more  and  more  the  master  of 
their  estates,  was  among  the  provocations  that  led  to  the  American 
war  of  independence.  While  the  war  lasted  English  goods  found 
but  scanty  access  to  American  markets,  and  the  people  were 
forced  to  make  for  themselves  the  articles  of  prime  necessity 
which  they  had  hitherto  bought  in  England.  Among  the  worst 
hardships  of  the  earlier  years  of  the  struggle  was  the  absence 
of  those  native  industries  that  would  have  made  the  country  in- 
dependent of  the  foreign  market.  The  return  of  peace  in  1783 
brought  ruin  upon  the  home  manufactures  which  the  war  had 
called  into  existence.  England  had  an  attack  of  the  exportation 
mania.  Every  one  who  had  hoarded  up  a  few  pounds,  even  the 
maid-servants,  invested  their  savings  in  a  '^  venture  "  to  the  new 
country.  The  American  market  was  flooded  with  British  wares; 
they  soon  sold  at  far  less  than  the  English  prices,  inflicting  se- 
vere loss  upon  these  "  adventurers.''    But  the  blow  fell  still  more 


S4'l  ELEMENTS   OF   POLITICAL   ECONOMY. 

heavily  upoa  the  workman  at  home.  "  Not  a  hatter,  a  boot  or 
shoe  maker,  a  saddler,  or  a  brass-founder,  could  carry  on  his 
business,  except  in  the  coarsest  and  most  ordinary  productions 
of  their  various  trades,  under  the  pressure  of  foreign  competi- 
tion. .  .  The  people  had  gone  to  war  not  for  names,  but  for 
things,  .  .  to  redress  their  own  grievances,  to  improve  their  own 
condition,  to  throw  off  the  burden  of  the  colonial  system.  .  .  . 
The  arm  which  struck  for  independence  in  the  field  was  palsied 
in  the  workshop  ;  the  industry  which  had  been  burdened  in  the 
colonies  was  crushed  in  the  free  states/'  The  Articles  of'  Con- 
federation, adopted  during  the  war,  constituted  a  central  govern- 
ment too  feeble  in  its  powers  to  remedy  this  and  other  evils. 
Individual  states  adopted  protective  tariffs,  but  these  cut  the 
confederation  into  parts  separated  by  custom-house  frontiers. 
To  remedy  this  a  new  and  stronger  union  was  demanded, — a 
government  constituted  directly  by  "  the  people  of  the  United 
States,"  and  not  by  a  contract  between  the  states,  a  government 
in  whose  hands  should  be  placed  the  power  "  to  promote  the 
general  welfare  "  by  providing  for  the  industrial  development 
of  the  whole  country.  The  new  Constitution  went  into  effect  in 
1789.  "I  conceive,  sir,"  says  Fisher  Ames,  a  leading  member 
of  the  Convention  that  drafted  it,  "  that  the  present  Constitution 
was  dictated  by  commercial  necessity  more  than  by  any  other 
cause.  The  want  of  an  efficient  government  to  secure  the  manu- 
facturing interests,  and  to  advance  our  commerce,  was  long  seen 
and  pointed  out."  The  power  to  regulate  both  foreign  com- 
merce and  that  between  the  states  was  clearly  vested  in  the 
national  government  by  the  new  document,  and  for  ever  taken 
away  from  the  states. 

§296.  President  Washington  was  inaugurated  in  a  coat  of 
hmnc-Bpun  cloth,  and  selected  for  Secretary  of  the  Treasury 
Alexander  Hamilton,  a  young  man  who  had  already  distinguished 
himself  as  a  man  of  business,  a  soldier  and  a  political  thinker, 
and  was  to  prove  himself  perhaps  the  very  greatest  of  American 
statesmen.  He  had  an  enormous  task  before  him  ;  the  country 
wau  burdened  with  an  unjustly  contracted  and  justly  hated  debt; 


ALEX.    HAMILTON'S   PROTECTIVE   POLICY.  345 

its  ciedit  destroyed,  its  people  all  but  bankrupt.     But  his  vigor- 
ous adQiinistration  of  the  finances  brought  back  prosperity. 

The  first  Congress  found  its  table  loaded  with  petitions  from 
the  business  men  of  all  the  leading  cities  of  the  Union  from 
Boston  to  Charleston ;  these  portrayed  the  ruin  that  had  been 
wrought  by  the  competition  of  the  foreign  trader,  not  only  upon 
manufactures  but  upon  all  the  interests  of  the  country,  and  with 
one  voice  asked  the  intervention  of  the  national  government  for 
its  protection.  A  bill  was  passed  (and  signed  by  the  President 
July  4th  1789)  imposing  ''  duties  on  goods,  wares  and  mer- 
chandise imported,"  this  being  "  necessary,"  the  preamble  alleges, 
"  for  the  payment  of  the  debts  of  the  United  States  and  the  en- 
couragement and  protection  of  manufactures."  These  duties 
were  very  low, — too  low  to  afi'ord  much  protection,  even  in  those 
day^s  when  the  cost  of  transport  was  so  great.  So  we  find 
Washington  reminding  the  adjourned  session  of  this  Congress 
(Jan.  1790)  that  "  the  safety  and  interest  of  the  people  require 
that  they  should  promote  such  manufactures  as  tend  to  render 
them  independent  of  others  for  essential  (particularly  for  mili- 
tary) supplies."  A  second  and  much  more  protective  tariff  was 
adopted  (August  1790)  after  Secretary  Hamilton  had  been  asked 
to  "  report  a  plan,  conformably  to  the  recommendation  of  the 
President,  for  the  encouragement  and  promotion  of  manu- 
factures." At  the  next  session,  October  1791,  Hamilton  made 
his  famous  "  Treasury  Report "  on  the  subject.  It  was  a  masterly  ^ 
statement  of  the  new  era  upon  which  industry  was  entering, 
through  the  use  of  machinery  and  the  division  of  labor ;  of  the 
advantages  that  would  be  lost  to  the  nation  who  fell  behind  in 
this  advance  ;  of  the  interdependence  of  all  the  material  interests  ^ 
of  the  country,  and  of  the  relation  of  a  diversified  industry  to 
national  prosperity.  He  stated  with  candor  and  refuted  with 
force  the  usual  objections  to  a  protective  policy.  He  pointed 
out  seventeen  branohes  of  manufacture  already  established,  and 
some  of  them  even  in  a  position  to  export  their  products.  He 
reminded  Congress  that  "  when  a  domestic  manufacture  has  at 


346  ELEMENTS   OF   POLITICAL   ECONOMY. 

tained  to  perfection,  and  has  engaged  in  the  prosecution  of  it  a 
competent  number  of  persons,  it  invariably  becomes  cheaper." 
Strangely  enough,  the  production  of  raw  cotton  was  one  of 
the  industries  specially  protected  at  this  period.  South  Carolina 
and  Georgia  were  at  this  time  in  a  state  of  industrial  prostration. 
India  had  secured  their  European  market  for  rice  and  indigo, 
and  the  price  had  fallen  so  low  that  it  was  not  worth  while  to 
export  them.  They  were  looking  around  for  some  other  staple, 
such  as  hemp ;  one  of  their  representatives  in  Congress  said  in 
1789  :  ''  cotton  was  likewise  in  contemplation  among  them,  and 
if  good  seed  could  be  procured  he  hoped  might  succeed.''  Kaw 
cotton  was  taxed  3  cents  a  pound  for  their  benefit,  being  8  or  10 
per  cent,  of  its  value,  and  this  was  continued  in  the  face  of 
Hamilton's  protest  that  it  was  unwise  to  put  a  duty  on  the  raw 
materials  of  a  manufacture.  For  years  every  New  England 
factory — almost  every  New  England  family — paid  three  cents  a 
pound  more  for  West  Indian  cotton.  In  1794:  Mr.  Jay,  in  nego- 
tiating a  treaty  with  Great  Britain,  put  cotton  into  the  list  of 
articles  not  to  be  imported  thither  in  American  ships.  In  1796 
a  Wilmiilgton  firm  petitioned  Congress  for  a  repeal  of  the  duty, 
and  was  refused  because  it  "  would  damp  the  growth  of  cotton 
in  our  own  country."  In  1794  Eli  Whitney,  a  Yankee  living  in 
Georgia,  and  observing  the  costly  and  clumsy  way  in  which  the 
cotton  was  cleaned  from  the  seeds  by  hand,  invented  the  cotton- 
gin,  which  gradually  revolutionized  the  industry  and  at  once  put 
the  Southern  States  ahead  of  all  competition. 

The  facts  are  given  in  detail  in  Edward  Everett's  Address  be/ore  the 
American  Itistitute  in  1831. 

§  297.  The  breaking  out  of  the  wars  that  followed  the 
French  Revolution  furnished  a  still  more  efi'ective  protection  to 
American  industry  by  interrupting  the  communication  with  Eu- 
rope—the British  Orders  in  Council  (1806)  having  declared 
the  coast  of  Europe  in  a  state  of  blockade^  and  the  Berlin  and 
Milan  Decrees  of  Napoleon  (1806  and  1807)  having  retorted 
with  a  similar  paper  blockade  of  the  British  Islands.  Ameri- 
can trading  vessels   had  to  run  the  risk  of  capture  by  one  of 


THE   LESSONS   OF   WAR  TIME.  347 

these  powers  wlieu  bound  for  the  dominions  of  the  other.  This, 
with  England's  claim  of  the  right  to  search  American  vessels 
for  English  seamen,  led  to  acts  of  retaliation  on  the  latter 
power.  All  British  vessels  were  ordered  to  leave  American 
ports,  and  an  embargo  was  laid  upon  American  vessels,  forbid- 
ding them  to  sail  for  England.  This  was  followed  by  a  non-in- 
tercourse law  in  1808,  renewed  in  1809.  In  1812  war  broke 
out  between  England  and  America,  and  the  duties  upon  all  spe- 
cies of  foreign  merchandise  were  doubled  to  meet  its  expenses, 
the  increase  to  be  in  force  till  a  year  after  its  close.  But  in 
spite  of  the  impulse  given  to  native  industry  by  the  political 
troubles,  it  found  the  United  States  unprepared.  "  What  did 
we  discover,"  says  Dr.  Bushnell,  •'  in  our  war  of  1812,  but  that 
we  had  nothing  to  equip  the  war?  Having  no  woollen  manu- 
facture, we  could  not  clothe  our  soldiers ;  we  could  not  even 
make*  a  blanket.  We  had  been  free  traders,  buying  all  such 
things  because  we  could  buy  them  cheaper ;  but  we  now  dis- 
covered that  we  might  better  have  been  making  blankets  at 
double  the  cost  for  the  last  fifty  years.  The  same  was  true  of 
saltpetre  for  gunpowder;  of  guns,  and  cannons,  and  swords, 
and  iron  and  steel  out  of  which  to  make  them We  be- 
gan, also,  to  discover  that  the  very  insignificant  article  of  salt, 
coming  short  in  the  supply,  was  nearly  a  dead  necessity — one  of 
the  munitions  of  war — and  that  manufacturing  it  for  ourselves 
at  double  the  cost  would  have  been  a  true  advantage.  .  .  .  We 
very  soon  discovered  in  the  facts  referred  to  the  lowness  of  our 
organization,  and  the  very  incomplete  scope  of  our  industrial 
equipments.  Our  products  were  not  various  enough  to  make  a 
complete  nation." 

The  tarift'  legislation  up  to  this  war,  and,  indeed,  till  1824, 
had  the  defect  of  the  tarifi"  of  1790 ;  while  framed  with  the 
best  intentions,  it  was,  in  fact,  inadequate.  Its  authors  had  as 
yet  no  conception  of  the  enormous  power  brought  to  bear  for  the 
destruction  of  our  industries  and  the  preservation  of  the  supre- 
macy of  British  manufactures.  It  was  part  of  the  English  pro- 
gramme to  keep  America  in  the  position  of  colonial  dependence 


348  ELEMENTS    OF   POLITICAL   ECONOMY. 

by  these  new  weapons  after  the  political  independence  of  the 
republic  had  been  acknowledged.  A  Birmingham  manufacturer 
prophesied  on  the  breaking  out  of  the  war  that  the  crops  of  the 
.United  States  would  be  devoured  with  vermin,  because  there 
was  not  skill  enough  in  America  to  manufacture  a  mouse-trap. 
Others  put  much  the  same  estimates  of  us  into  more  polished 
forms;  the  chief  industrial  function  they  saw  in  the  young 
republic  was  its  power  to  purchase  English  goods.  As  Lord 
Lyndhurst  said  in  1838  :  "  The  United  States  of  America  was 
always  considered  our  own  especial  market.''  "  The  extent  and 
swift,  regular  progress  of  the  American  market  for  English 
goods,"  said  Henry  (afterwards  Lord)  Brougham  in  1813,  '^  we 
can  easily  account  for America  is  an  immense  agricul- 
tural country,  where  land  is  plentiful  and  cheap  -,  men  and 
labor,  though  quickly  increasing,  are  yet  still  scarce  and  dear 
when  compared  with  the  boundless  regions  which  they  occupy 
and  cultivate.  In  such  a  country  manufactures  do  not  natu- 
rally thrive  ;  every  exertion,  if  matters  be  left  to  themselves^ 
goes  into  other  channels.  This  people  is  connected  with 
England  by  origin,  language,  manners  and  institutions;  their 
tastes  go  along  with  their  convenience,  and  they  come  to  us,  as 
a  matter  of  course,  for  the  articles  they  do  not  make  them- 
selves." After  noting  that  they  bought  about  £16,000,000  a 
year  of  English  cloths,  he  continues  :  "  But  it  is  not  merely  in 
clothing.  Go  to  any  house  in  the  Union,  from  their  large  and 
wealthy  cities  to  the  most  solitary  cabin  or  log-house  in  the 
forests — you  find  in  every  corner  the  furniture,  tools  and  orna- 
ments of  Staffordshire,  of  Warwickshire,  and  of  the  northern 
counties  of  England The  whole  population  of  the  coun- 
try is  made  up  of  customers,  who  require  and  who  can  afford  to 
pay  for  our  goods."  But  the  Orders  in  Council  had  made  a 
change.  The  English  system  was  "  forcing  manufactures  all  over 
America  to  rival  our  own.  There  is  not  one  branch  of  the  many 
in  which  we  used  quietly,  and  without  fear  of  competition,  to 
supply  them,  that  is  not  now,  to  a  certain  degree,  cultivated  by 


'^STIFLE   THEM   IN   THE   CRADLE.'*  349 

themselves ;  many  have  wholly  taken  rise  since  1807 — all  have 
rapidly  sprung  up  to  a  formidable  maturity." 

§  298.  When  the  war  ended  there  was  a  considerable  por- 
tion of  the  people  of  the  United  States  engaged  in  manufac- 
tures, and  a  large  amount  of  capital  had  been  turned  in  that 
direction,  and  could  not  be  diverted  into  others  without  great 
loss  to  its  owners.  This  fact  was  not  due  to  any  financial  legis- 
lation, wise  or  unwise  ;  it  grew  out  of  the  necessities  of  the  war. 
New  England,  the  chief  commercial  quarter  of  the  Union,  had 
seen  her  merchant  marine  rotting  at  her  quays  month  after 
month  and  year  after  year.  She  had  groaned  and  fretted,  but 
she  did  not  fold  her  hands  in  fretting.  She  went  into  the  new 
work  of  home  manufactures  with  all  her  strength.  What  would 
the  nation  do  to  support  these  industries  that  its  act  had  called 
into  being  after  destroying  her  shipping — the  nation  into  whose 
hands  she  had  given  the  control  of  her  material  interests  ?  Eng- 
lish capitalists  did  not  wait  for  the  question  to  be  solved  ;  another 
mania  of  exportation  seized  'them  ;  they  deluged  America  as  they 
were  deluging  the  Continent,  with  the  goods  that  the  war  had 
hitherto  kept  them  from  exporting.  "  The  frenzy,'^  says 
Brougham  in  1816,  ''I  can  call  it  nothing  less  after  the"  South 
American  "experiences  of  1806  and  1810,  descended  to  persons 
in  the   humblest  circumstances,  and  the  furthest  removed  by 

their  pursuits  from  commercial  cares Not  only  clerks 

and  laborers,  but  menial  servants,  engaged  the  little  sum  they 
had  been  laying  up  for  a  provision  against  old  age  and  sickness." 
He  is  speaking  of  the  Continental  trade,  but  he  adds  :  "  The 
peace  with  America  has  produced  somewhat  of  a  similar  eflfect, 
though  I  am  very  far  from  placing  the  vast  exports  which  it  oc- 
casioned upon  the  same  footing  with  those  to  the  European  mar- 
ket the  year  before ;  both  because  ultimately  the  Americans  will 
pay,  which  the  exhausted  state  of  the  Continent  renders  very 
unlikely ;  and  because  it  was  well  worth  while  to  incur  a  loss 
upon  the  first  exportation,  in  order,  by  the  glut,  to  stifle  in  the 
cradle  those  rising  manufactures  in  the  United  States,  which  the 
war  had  forced  into  existence,  contrary  to  the  natural  course  of 


350  ELEMENTS   OF   POLITICAL   ECONOMY. 

thin"^ Eighteen  millions  worth  of  goods,  I  believe,  were 

exported  to  North  America  in  one  year,  and  for  a  considerable 
part  of  this  no  returns  have  been  received,  while  still  more  of 
it  must  have  been  selling  at  a  very  scanty  profit." 

§  299.  The  first  session  of  Congress  after  the  war  began  two 
months  before  the  date  at  which  the  doable  duties  on  imports 
would  cease.  President  Madison  in  his  message  called  attention 
to  the  eflfect  that  the  war  had  had  upon  manufacturing  indus- 
try ;  "  it  has  made  among  us  a  progress,  and  exhibited  an  eflB- 
ciency  which  justifies  the  belief  that,  with  a  protection  noi 
more  than  is  due  to  the  enterprising  citizens  whose  interests  are 
now  at  stake,  it  will  become  at  an  early  day  not  only  safe  against 
occasional  competition  from  abroad,  but  a  source  of  domestic 
wealth,  and  even  of  external  commerce."  Of  the  numerous 
petitions  which  urged  the  same  facts  upon  Congress,  that  of 
the  cotton-spinners  excited  most  attention.  This  industry  em- 
ployed some  100,000  persons,  and  produced  goods  of  the  value 
of  $24,000,000,  having  increased  nine-fold  during  the  war; 
it  consumed  American  cottons,  and  thus  contributed  to  the  pros- 
perity of  the  South.  For  this  reason,  apparently,  it  received 
the  support  of  some  Southerners,  notably  that  of  John  C.  Cal- 
houn. After  hot  discussion,  a  duty  of  thirty,  twenty-five  and 
twenty  percent,  was  laid  on  cottons,  descending  every  two  years, 
and  $7.50  a  ton  on  pig  iron.  The  whole  tariif  was  a  sort  of  com- 
promise between  protection  and  free  trade ;  like  its  predecessors, 
it  even  fell  short  of  what  its  authors  expected,  and  formed — as 
we  have  seen — no  effectual  barrier  against  excessive  and  specu- 
lative imports.  The  years  when  it  was  in  operation  were  years 
of  distress  and  embarrassment;  the  tale  of  bankruptcies  length- 
ened out  day  by  day  ;  the  value  of  home  produce  and  of  all  sorts 
of  property  declined.  The  revenue  showed  a  yearly  deficit,  and 
the  national  currency  fell  off  fifty-nine  per  cent,  in  three  years, 
indicating  a  general  stagnation  in  commerce.  All  interests  suf- 
fered, notably  the  farmers,  who  largely  petitioned  against 
duties,  and  talked  as  if  our  government  could  repeal  the 
English  corn  laws.      The  manufactures  of  earthenware,  glass, 


OUR   FIRST    GOOD    TARIFF.  351 

white  and  red  lead,  wholly  disappeared  -,  that  of  iron  was  at  the 
point  of  extinction.  The  manufacturers  never  ceased  to  peti- 
tion Congress  to  extend  to  them  even  a  fraction  of  the  protection 
enjoyed  by  their  English  and  French  rivals. 

When  Congress  met  in  December  1823,  President  Monroe 
for  the  second  time  urged  the  adoption  of  additional  duties 
upon  imported  manufactures,  and  in  January  a  new  tariff  bill 
was  reported.  It  proposed  higher  rates  of  duty  because  "  what 
in  1816  was  called  '  a  moderate  protecting  duty,'  would  scarcely 
have  been  adequate  protection  against  a  fair  and  liberal  Eu- 
ropean competition,  but  was  absolutely  nothing  against  the 
oppression  of  wealthy  foreign  manufacturers,  who  can  afford 
cargoes  of  their  goods  at  reduced  prices  or  at  no  prices,  in  order 
to  break  down  a  growing  rival,  and  indemnify  themselves  by 
fleecing  the  country  afterwards.''  The  chief  advocate  of  the 
measure  was  Henry  Clay,  of  Kentucky ;  its  chief  opponent 
Daniel  Webster,  of  Massachusetts.  The  same  antagonism  of 
their  views  had  been  brought  out  in  the  debate  on  the  amount 
of  the  duties  to  be  imposed  in  1816.  New  England  had 
already  invested  a  large  amount  of  money  in  manufacturing, 
but  not  so  much  as  to  make  that  a  controlling  interest ;  her 
vote,  which  was  for  Free  Trade  before  the  war,  was  now  divided 
(15  to  23).  As  a  large  majority  of  the  South  were  now  op- 
posed to  the  policy  which  had  called  their  cotton-growing  into 
existence  and  had  given  it  the  command  of  the  home-market  in 
the  years  of  its  weakness,  the  bill  was  carried  by  the  votes  of 
the  Middle  and  Western  States.  For  the  first  time  the  country 
had  a  tariff  that  was,  both  in  its  purpose  and  in  its  effects,  pro- 
tective. One  marked  defect  it  had ;  the  duties  on  woollen 
goods,  both  in  their  amount  and  the  manner  of  their  imposition, 
were  far  from  satisfactory.  This  manufacture  languished  while 
all  others  throve.  A  bill  to  remedy  this  was  passed  by  the 
House  in  1827,  and  lost  in  the  Senate,  which  it  reached  too  late 
for  passage. 

§300.  In  December  1828,  the  Report  of  the  Secretary  of 
the  Treasury,  Mr.  Rush,  called   attention  to  the  general  pros- 


352  ELEMENTS   OF   POLITICAL   ECONOMY. 

perity  that  had  followed  the  adoption  of  the  tariff  of  1824, 
and  especially  the  way  in  which  it  had  given  the  country  such 
a  measure  of  industrial  dependence,  as  prevented  the  European 
panic  of  1826  from  seriously  affecting  American  interests;  he 
Bu<::gested  an  increase  of  some  leading  duties.  At  the  end  of 
January  the  tariff  of  1828  was  reported  and  passed  after  a  bril- 
liant debate,  in  which  Mr.  Webster  now  took  the  affirmative 
side,  declaring  that  New  England  was  now  for  protection.  The 
South  complained  that  they  had  reaped  none  of  the  advantages 
of  the  new  system  ;  that  they  were  falling  off  in  wealth  rather 
than  advancing — complaints  probably  due  to  the  growing  contrast 
between  the  regions  blighted  by  slave  labor  and  those  blessed 
with  free  industry.  With  some  changes  in  the  method  of  as- 
sessing duties,  and  a  few  in  their  rates,  this  tariff  remained  in 
force  till  1832. 

"  "We  cannot  manufacture,  said  Senator  Hayne,  of  South  Carolina, 
in  1832,  "except  as  to  a  few  coarse  articles;  slave  labor  is  utterly  incapa- 
ble of  being  successfully  applied  to  such  an  obj.ect.  Slaves  are  too  im- 
provident j  too  incapable  of  that  minute,  constant,  delicate  attention 
and  that  persevering  industry  which  is  essential  to  the  success  of  manu- 
facturing establishments." 

§  30L  How  did  the  country  prosper  under  the  new  system, 
as  compared  with  the  old  ?  "  If  I  were  to  select,"  says  Henry 
Clay  in  1881,  "any  term  of  seven  years  since  the  adoption  of 
the  present  Constitution,  which  exhibits  a  scene  of  the  most  wide- 
spread dismay  and  desolation,  it  would  be  exactly  that  term  of 
seven  years  which  immediately  preceded  the  establishment  of 
the  tariff  of  1824."  As  to  the  state  of  the  nation  when  he 
spoke :  "  We  behold  cultivation  extended,  the  arts  flourishing, 
the  face  of  the  country  improved,  our  people  fully  and  profitably 
employed,  ...  a  people  out  of  debt;  land  rising  slowly  in 
value,  but  in  a  secure  and  salutary  degree ;  a  ready,  though  not 
extravagant  market  for  all  the  surplus  products  of  our  industry  ; 
.  .  .  our  cities  expanded  and  whole  villages  springing  up  as  if 
by  enchantment;  our  tonnage,  foreign  and  coastwise,  swelling 
and  fully  occupied;  .  .  .  the  currency  sound  and  abundant,* 


SOUTH    CAROLINA    TRIES    NULLIFICATION.  353 

the  public  debt  of  two  wars  nearly  redeemed,  and,  to  crown  all, 
the  public  treasury  overflowing — embarrassing  Congress  not  to 
find  subjects  of  taxation,  but  to  select  objects  w4iich  shall  be  re- 
lieved from  impost.  If  the  term  of  seven  years  were  to  be  se- 
lected of  the  greatest  prosperity  which  this  people  have  enjoyed 
since  the  establishment  of  their  present  Constitution,  it  would  be 
exactly  that  period  of  seven  years  which  immediately  followed 
the  passage  of  the  tariff  of  1824." 

The  tariff  of  1828  imposed  a  large  number  of  duties  for  reve- 
nue upon  articles  (tea,  coffee,  &c.)  not  produced  in  the  United 
States,  in  opposition  to  the  wishes  of  Clay  and  the  consistent 
protectionists.  In  1832  these  were  removed  or  largely  reduced, 
while  some  of  the  protective  duties  were  slightly  so,  partly  with 
a  view  to  reducing  the  revenue,  which  was  considerably  in 
excess  of  the  needs  of  the  government. 

§302.  In  1833  the  question  took  a  political  shape ;  South 
Carolina,  with  the  moral  support  of  Virginia,  Georgia  and  Ala^ 
bama,  announced  her  purpose  to  resist  the  enforcement  of  the 
national  tariff  legislation.  President  Jackson,  who  had  always 
advocated  protection,  was  now  full  of  the  impending  danger  to 
the  Union ;  he  saw  all  questions  through  the  one  medium,  and 
advised  a  reconsideration  of  the  tariff  in  detail  and  the  removal 
of  some  of  its  duties.  Henry  Clay,  being  likewise  a  candidate 
for  the  presidency,  saw  matters  in  much  the  same  light.  Ho 
was  an  honest  man  at  heart,  who  "  would  rather  be  right  than 
be  President,"  but  the  concealed  magnet  in  the  White  House 
often  makes  the  most  honest  compasses  deflect  from  the  north  star 
of  principle.  He  introduced  a  compromise  bill  into  the  Senate, 
providing  for  a  gradual  lowering  of  duties,  by  which  they  were 
to  be  reduced  to  twenty  per  cent,  on  the  30th  of  June  1812, 
It  was  only  three  weeks  before  the  end  of  the  session,  but  the 
bill  was  carried  through  both  houses  before  the  session  closed. 
Till  1842  the  process  of  reduction  went  on,  and  the  gradual  clos- 
ing of  American  factories  and  workshops  went  with  it.  The  capi- 
tal of  the  country,  the  accumulatiofis  of  years  of  protected  and 
prosperous  industry,  being  driYeu  from  manufactures,  sought  a 
23 


354  ELEMENTS   OF    POLITICAL    ECONOMY. 

channel  for  investment  in  other  quarters.  The  sale  of  public 
lands  rose  in  1836  to  $24,877,179,  or  more  than  ten  times  what 
had  been  the  average  rate.  There  was  an  enormous  expansion 
of  the  currency  and  inflation  of  prices.  Imports  increased 
seventy-five  per  cent.  Speculation  ran  riot ;  wild-cat  banks  grew 
up  as  fast  as  mushrooms.  The  craziest  schemes  to  become  rich 
without  the  trouble  of  earning  wealth  by  hard  work,  found  ready 
listeners.  M.  Chevalier,  who  visited  America  at  this  time,  says  in 
the  account  of  what  he  saw  in  1835  :  "  Everybody  is  speculating, 
and  cver^-thing  has  become  an  object  of  speculation.  The  most 
daring  enterprises  find  encouragement;  all  projects  find  sub- 
scribers." Places  were  sold  as  building  lots  that  lay  far  beyond 
the  range  of  settlement  for  years  to  come;  cities  grew  up  in  a 
night — on  paper;  sites  of  houses  and  streets  that  lay  in  pesti- 
lential marshes,  or  on  naked  precipices  of  rock,  or  six  feet  under 
water,  found  eager  buyers.  No  new  channels  for  industrial  en- 
terprise were  opening;  the  old  were  closing;  the  enterprise  that 
must  find  an  outlet  somewhere  sought  all  manner  of  absurd  and 
hazardous  channels.  We  were  to  produce  all  sorts  of  raw  ma- 
terials that  the  old  world  had  monopolized ;  the  moms  mvlticau- 
lis  was  to  give  us  cheap  silk  for  the  whole  world.  Then  in  1837 
came  tlie  crash,  the  banks  suspended  specie  payment,  and  the 
country  wakened  up  from  a  feverish  dream  to  find  itself  on  the 
point  of  bankruptcy.  The  revenue  fell  off  so  greatly  that  the 
government  was  obliged  to  ask  loans,  first  in  the  home  and  then 
in  the  foreign  money  market,  and  met  only  with  rebuff  in  both, 
although  the  loan  asked  was  less  than  a  fourth  of  its  ordinary 
income.  Labor  ran  begging  for  employment,  and  during  1839- 
18 U,  the  cry  was  heard  far  and  near,  "  Give  me  work,  only  give 
me  work  !  Make  your  own  terms ;  myself  and  family  have 
nothing  to  eat  I" 

By  1840  the  country  was  thoroughly  aroused,  and  elected  a 
protectionist  President,  after  the  fiercest  political  campaign  in 
our  history.  When  Congress  met  in  December  of  1841,  Gen. 
Harrison  was  dead,  but  his*  successor,  Tyler,  recommended  an 


THE   DALLAS   TARIFF   AND    ITS    METHODS.  355 

increase  of  duties  in  a  conciliatory  spirit.  The  tariflF  of  1842, 
one  of  the  best  and  most  protective  ever  enacted,  was  adopted, 
and  no  more  threats  of  secession  were  heard.  The  prosperity 
that  free  trade  was  to  bring  to  the  South  had  not  been  achieved, 
and  the  preservation  and  extension  of  slavery  now  absorbed  the 
attention  of  that  section.  The  new  policy  bore  the  old  fruits ; 
languishing  industries  were  quickened  into  life;  with  the  growth 
of  the  power  to  purchase,  foreign  commerce  revived ;  govern- 
ment reaped  a  large  revenue,  and  the  finances  of  the  country 
were  again  in  a  satisfactory  state.  The  home  production  of  great 
staples  was  multiplied,  and  the  prices  of  many  of  them  fell. 
A  better  and  more  trustworthy  currency  came  into  circulation. 
Then,  in  1846,  the  policy  was  changed  once  more,  and  that 
of  military  aggression  upon  weaker  neighbors  at  home  suc- 
ceeded that  of  industrial  resistance  to  more  powerful  nations 
abroad.  England,  after  some  five  centuries  of  rigid  protection, 
had  adopted  the  policy  of  free  trade,  and  was  preaching  it  with  all 
her  eloquence  to  the  rest  of  the  world.  Mr.  Robert  J.  Walker, 
secretary  of  the  U.  S.  treasury,  was  one  of  her  disciples.  "  Let 
them  aJone^'  he  told  Congress,  "  is  all  that  is  required  of  man ; 
let  all  international  exchanges  of  products  move  as  freely  in 
their  orbits  as  the  heavenly  bodies  in  their  spheres,  and  their 
order  and  harmony  will  be  as  perfect,  and  their  results  as  bene- 
ficial, as  in  every  movement  under  the  laws  of  nature  when  un- 
disturbed by  the  errors  and  interference  of  man.''  But  even  a 
Democratic  Congress  had  not  quite  forgotten  the  past,  nor  broken 
so  far  with  the  Democratic  precedents  of  1824-1828.  The 
Dallas  tarifi"  of  1846  was  still  protective.  It  adopted,  indeed, 
the  vicious  method  of  imposing  ad  valorem,  duties,  while  those 
of  1842  had  been  specific;  and  it  taxed  a  host  of  articles  that 
better  tariffs,  before  and  since,  put  into  the  free  list.  But  it 
still  imposed  duties  of  from  40  to  20  per  cent,  upon  the 
great  staples  of  manufacture.  Had  these  rates  been  calculated 
on  the  average  price  of  the  several  articles,  and  then  made  spe- 
cific at  that  figure,  the  effect  would  have  been  far  better.  For 
ad  valorem  duties  make  the  h-ome  market  far  more  dependent 


356  ELEMENTS   OF   POLITICAL   ECONOMY. 

upon  the  fluctuations  of  the  foreign  market,  and  in  the  long  run 
bring  it  under  the  power  of  the  trader  and  the  foreign  producer. 
Thus  during  the  years  1846-9  English  iron  was  cheap,  selling  in 
New  York  at  $10  a  ton,  and  largely  driving  the  home  producer 
out  of  the  market.  One- third  of  the  furnaces  and  iron-mills 
of  Pennsylvania  ceased  operations  soon  after  the  tariff  was 
enacted,  many  being  sold  out  by  the  sheriff;  the  rest  were  sorely 
crippled,  and  the  amount  of  their  production  greatly  diminished. 
The  iron  men  met,  and  in  a  memorial,  prepared  by  Stephen  Col- 
well,  expostulated  with  Congress,  showing  that  the  ruin,  which 
was  impending  over  their  industry,  would  be  a  costly  injury  to 
the  whole  country.  They  predicted  that  if  home  competition 
were  out  of  the  way,  the  nation  would  soon  learn  that  the  prico 
of  British  iron  was  fixed,  not  by  the  cost  of  production  but  by 
the  demand  made  upon  that  market,  and  the  dependent  condi- 
tion of  their  customers.  Their  remonstrances  were  unheeded ; 
the  work  of  destroying  a  great  industry  went  on,  and  its  traces 
may  be  seen  in  the  old  furnaces  of  the  Alleghany  ridges.  Iq 
1851— i,  when  home  competition  was  virtually  out  of  the  way, 
iron  sold  for  $80  a  ton,  whereas  native  iron  had  been  furnished 
for  $60.  When  English  iron  was  cheap,  the  duty  was  also  low, 
and  the  native  producer  was  driven  from  the  home  market. 
When  it  rose  in  price,  the  duty  rose  also,  and  enhanced  its  value 
to  a  degree  that  greatly  checked  its  consumption.  But  this  rise 
gave  no  security  to  the  home  producer  to  increase  his  turn-out, 
or  to  the  capitalist  to  begin  iron-works.  Neither  could  tell  how 
Hoon  a  real  or  an  artificial  cheapness  might  destroy  his  market 
again.  There  was  no  security  for  the  home  producer,  while  the 
home  consumer  was  fleeced  to  the  uttermost. 

The  Dallas  tariff  lasted  till  1857,  and  inflicted  injuries  upon 
nearly  all  our  industries,  preventing  the  influx  of  capital  in  that 
direction.  To  compensate  for  this  we  were  to  have  an  unlimited 
foreign  market  for  breadstuffs  since  England  had  repealed  the 
corn  laws.  The  more  we  bought  of  her,  the  more  we  must  sell 
her,  as  "commodities  are  paid  for  with  commodities."  The 
commodity  witl    which  we  chiefly  paid  was  gold.     The   tariff 


THE   slave-holders'    POLICY.  357 

increased  the  dependence  of  the  country  upon  both  the  buyer 
and  the  seller  of  foreign  markets.  Its  bad  effects  were  alleviated 
by  the  discoveries  of  gold  in  California,  which  gave  an  impulse 
to  all  kinds  of  business.  In  1857  Congress  reduced  the  duties 
by  twenty-five  per  cent.  This  was  not  a  sudden  change  of 
policy,  but  the  crowning  of  the  edifice  that  had  been  building 
for  eleven  years  past.  It  at  once  intensified  all  the  unwhole- 
some tendencies  in  our  commercial  and  industrial  life,  turned 
capital  once  more  from  production  to  speculation,  and  led  to 
a  large  and  varying  increase  of  importations.  Another  great 
panic  followed  through  the  collapse  of  unsound  enterprises,  and 
carried  with  it  many  that  were  sound.  Every  one  had  been  buy- 
ing at  any  price ;  every  one  made  haste  to  sell,  and  found  no 
customers.  Lands  in  what  was  then  the  far  West,  by  whose 
purchase  fortunes  were  confidently  expected,  were  sold  by  the 
county  to  pay  the  taxes.  The  treasury  was  again  depleted,  and 
years  came  in  which  it  must  borrow  the  means  to  carry  on  the 
government. 

In  1860  the  Republican  party,  composed  very  largely  of  the 
old  Protectionist  party,  won  its  first  national  victory,  and  broke, 
for  the  third  time  in  sixty  years,  the  Democratic  succession  of 
Presidents.  In  1861  the  war  for  the  Union  began,  and  the 
Morrill  tarifi"  was  enacted,  and  up  to  the  present  writing  that 
'policy  has  been  persisted  in  by  the  nation.  Not  that  that  tariff, 
either  in  its  original  form  or  as  subsequently  modified,  is  satis- 
factory in  its  application  of  general  principles.  It  has  been  made 
more  satisflictory,  indeed,  by  fairer  protection  to  the  woollen  in- 
dustry, and  by  the  removal  of  duties  that  had  been  laid  upon 
articles  that  cannot  be  produced  at  home.  Another  great  defect 
in  our  financial  system  was  the  heavy  internal  revenue  duties 
levied  until  after  the  war, — duties  that  took  away  with  one  hand 
nearly  all  that  was  given  with  the  other. 

When  the  war  began  American  industry  was  unable  to  furnish 
all  the  materials  to  arm  and  equip  the  national  forces.  Steel  and 
cloth,  and  blankets,  had  to  be  got  from  England ;  and  fortunately 
the  seas  were  open.     Long  before  it  closed  all  these  elements 


,S58  ELEMENTS   OF   POLITICAL   ECONOMY. 

of  the  national  defence  were  produced  at  home,  of  as  good 
luality  and  in  quantities  large  enough  to  meet  any  demand. 
But  from  the  very  start  to  the  close  of  the  struggle  the  North 
renped  the  advantage  of  the  possession  of  that  diversified  in- 
dustry which  had  perpetuated  itself  in  the  face  of  so  many  dis- 
couragements, and  now  sprang  into  vigorous  life ; — while  the 
merely  agricultural  South  was  continually  hampered  through  the 
absence  of  manufactures,  of  the  middle  class  who  sustain  them, 
and  of  the  industrial  habits  which  they  cultivate. 

§  303.  Nine  times  in  one  hundred  years  the  American  people 
have  changed  their  financial  policy,  sometimes  carried  from  Pro- 
tection toward  Free  Trade  by  the  influence  of  specious  theories, 
but  as  often  driven  back  to  the  policy  of  Protection  by  hard  expe- 
rience. The  two  periods  of  longest  continuance  in  any  policy  is 
the  Protectionist  period  which  followed  the  establishment  of  the 
government  (1789-1801),  and  the  Protectionist  period  in  which 
we  now  are  living.  Four  times  the  scaffolding  of  the  tarifi"  has 
been  torn  down  from  the  uncompleted  edifice  of  our  industrial 
development,  and  as  often  the  work  has  been  begun  again — if 
not  from  the  foundation,  yet  from  a  point  much  less  advanced 
than  had  been  reached  under  the  previous  protective  tariff.  This 
time  it  seems  to  be  the  nation's  purpose  that  the  scaffold  shall  be 
kept  up  until  the  roof  is  on. 

§  304.  It  is  admitted  on  all  hands  that  the  effect  of  our  pres- 
ent protective  tariff  has  been  an  extraordinary  develojJment  of 
our  manufacturing  industries,  and  a  rapid  advance  toward  a 
period  when  we  shall  be  altogether  independent  of  the  rest  of 
the  world  as  regards  all  the  great  staples  which  are  capable  of 
economical  production  on  American  soil.  The  census  of  1870 
showed  an  increase  of  more  than  one  hundred  and  eight  per 
cent,  in  the  value  of  our  manufactures;  that  of  1880  is  ex- 
pected to  show  a  still  greater  advance.  Between  these  two 
censuses  came  the  great  Centennial  Exhibition,  which  was  to 
multitudes  of  the  American  people  a  revelation  of  the  growth 
of  our  industries  in  quality  and  in  quantity  alike.  No  part  of 
that  vast  display  excited  so  much  patriotic  satisfaction  as  did 


PROF.  ROULEAUX  AT  THE  CENTENNIAL.     359 

the  accumulated  results  of  American  skill  and  ingenuity  ex- 
hibited in  Machinery  Hall.  Prof.  Rouleaux  of  Berlin  was  at 
least  as  well  fitted  as  any  of  our  foreign  visitors  to  pronounce  an 
estimate  of  the  whole  exhibit  of  our  industries.  He  declared  it 
to  be  one  for  which  Europeans  were  quite  unprepared  as  regards 
its  abundance  and  magnificence,  and  the  admirable  adaptation  of 
means  to  ends  in  all  our  processes  and  implements.  In  his 
opinion  American  manufacture  has  escaped  a  great  mischief 
in  aiming  at  good  quality  rather  than  mere  cheapness  in  its 
products;  and  he  deplores  the  fact  that  Germany  has  injured 
herself  and  lost  her  hold  on  the  best  customers  by  following  the 
lead  of  England  in  this  respect.  In  many  lines  of  manufacture, 
such  as  cottons  of  all  the  lower  grades,  American  goods  take  pre- 
cedence of  every  other  in  point  of  excellence ;  and  in  England 
itself  a  demand  exists  for  our  cottons  as  the  most  trustworthy 
that  are  to  be  found. 

§  305.  Prof  Rouleaux  very  justly  criticised  as  unsatisfactory 
those  branches  of  our  manufactures  which  employ  the  arts  of  design. 
He  found  clumsy  earthenwares,  ill-designed  and  crudely-colored 
carpets,  an  excess  of  allegorical  motive  in  our  silver  and  other 
ornamental  wares,  and  a  general  failure  to  put  the  finest  materials 
in  the  world  to  the  most  effective  use.  Those  criticisms  would 
hardly  be  just  if  repeated  now.  The  year  1876  was  a  time  of 
new  beginnings  in  the  development  of  those  branches  of  manu- 
facture which  demand  the  application  of  artistic  taste  and  skill. 
The  sight  of  what  other  countries  had  done  in  this  department 
was  a  stimulus  to  our  own  efibrts,  and  in  the  following  years  the 
application  of  art  to  manufactures  advanced  with  rapid  strides. 
Much  is  still  needed,  especially  in  the  general  diffusion  of  a 
knowledge  of  the  arts  of  design  through  our  public-school 
system;  but  a  country  which  is  admitted  to  have  outstripped 
every  other  in  the  quality  of  its  wood-engraving  must  possess 
in  its  own  people  artistic  resources  which,  if  developed,  will 
make  it  altogether  independent  of  the  help  of  foreign  de- 
signers. 

§  306.  In  the  development  of  American  ingenuity  the  pro- 


360  ELEMENTS   OF   POLITICAL   ECONOMY. 

tective  policy  has  played  a  remarkable  part.  Mr.  MilFs  sug- 
gestion, that  the  establishment  of  an  old  industry  among  a  new- 
people  is  followed  generally  by  improvements  in  its  methods,  is 
fully  confirmed  by  recent  American  experiences.  In  many  manu- 
facturing establishments  there  is  a  standing  offer  of  rewards  for 
such  improvements  devised  by  the  workmen.  American  im- 
provements are  not  monopolized  by  our  manufacturers.  We 
have  no  law  against  their  export,  such  as  England  maintained 
for  nearly  a  century,  and  Mr.  McCulloch  defended  in  his  Die- 
tionary  of  Commerce.  Our  models  of  axes,  saws  and  other 
tools  are  reproduced  in  Birmingham ;  our  improvements  in  the 
Bessemer-steel  apparatus  are  copied  in  the  North  of  England ; 
sewing-machines  are  made  abroad  under  all  our  expired  and 
many  of  our  unexpired  patents,  royalty  being  paid  in  the  latter 
case ;  and  so- forth.  An  English  authority  laments  the  fact  that 
nearly  every  labor-saving  invention  of  recent  years  is  of  Amer- 
ican origin.  The  centrifugal  apparatus  for  refining  sugar  is 
a  notable  exception  to  this  rule ;  but  it  is  the  rule.  The  cost 
of  some  of  the  great  staples  has  been  reduced,  not  only  to 
America,  but  to  the  world,  by  the  protective  policy,  which  set 
American  invention  to  overcome  Nature's  resistance  to  our  get- 
ting them  cheaply.  And  we  look  for  still  greater  results  of  this 
kind  in  the  future. 

§  307.  Our  tarifi"  is  found  fault  with  because  it  does  not 
make  men  prudent  and  virtuous,  besides  giving  them  the  oppor- 
tunity to  become  prosperous.  (1)  It  is  said  to  be  responsible  for 
the  over-production  which  has  characterized  some  branches  of 
manufacture.  Thus,  although  we  do  not  produce  cotton  goods 
sufficient  to  supply  the  national  demand,  we  do  produce  more 
than  enough  of  the  more  homely  and  substantial  sorts;  and  at 
times  our  cotton-fiictories  are  forced  to  diminish  their  production 
below  their  capacity,  and  to  reduce  the  time  and  wages  of  their 
work-people.  The  same  evil  occurs,  and  more  frequently,  in 
Ijancashire  under  Free  Trade.  The  common  cause  in  both 
countries  is  a  defective  judgment  as  to  the  capacity  of  the 
market,  and  no  legislation  can  be   devised  which  will  obviate 


DOES   THE   TARIFF    MAKE   MEN    IMMORAL?  361 

the  difficulty.  There  still  are  plenty  of  openings  for  ihe  in- 
vestment of  new  capital  in  manufactures,  if  our  manufacturers 
will  study  the  lists  of  imports  to  find  where  the  home  supply 
is  inadequate  to  the  home  demand. 

§  308.  The  depression  of  1873  and  the  following  year  grew 
out  of  an  excessive  construction  of  railroads  in  America,  and  a 
consequently  feverish  stimulation  of  the  iron  and  steel  indus- 
tries. The  great  outlays  in  wages  to  iron-workers  imparted  a 
similar  impetus  to  textile  and  other  manufactures,  which  con- 
tinued until  the  collapse  of  the  Northern  Pacific  Kailroad  pre- 
cipitated a  panic  far  less  severe  than  those  of  1837  and  1857, 
but  whose  effects  were  felt  for  years. 

§  309.  (2)  Again,  in  the  course  of  time  a  duty  becomes  exces- 
sive through  a  change  in  the  conditions  of  production,  and  it  is  said 
that  the  American  manufacturer,  if  the  home  competition  do  not 
prevent  this,  will  raise  his  price  to  the  highest  figure  permitted 
by  the  tariff,  and  will  make  excessive  profits  by  doing  this. 
Whether  this  be  an  actual  situation  or  not,  it  is  a  conceivable 
one.  There  are  two  remedies  for  it.  One  is  found  in  the 
certainty  that  excessive  profits  will  increase  home  competition 
by  leading  to  a  large  investment  of  capital  in  that  particular  in- 
dustry; another  may  be  found  in  the  reduction  of  the  duty  tq, 
an  amount  sufficient  to  compensate  the  disadvantages,  as  regards 
labor,  capital,  taxation  and  so  forth,  under  which  the  American 
producer  lies.  The  principle  of  protection  justifies  no  duty  of  a 
higher  rate  than  this.  In  so  lur  as  the  tariff  goes  beyond  it, 
it  is  not  protective,  but  prohibitive. 

But  it  is  altogether  absurd  to  abuse  the  tariff  because  business- 
men will  not  resist  the  temptation  to  take  advantage  of  such  a 
situation  as  has  been  supposed.  The  tariff  will  produce  no 
higher  results  than  the  average  morality  of  the  business  com- 
munity. This  average  is  in  America  at  least  as  high  in  the 
manufacturing  class  as  in  any  other.  Dr.  Lyon  Playfair  thinks 
he  finds  in  the  honesty  of  our  manufactures  the  traces  of  the  old 
Puritan  passion  for  righteousness.  His  praise  may  be  deserved, 
without  being  true  of  all   our   manufacturers.     But  certainly 


362  ELEMENTS   OF   POLITICAL   ECONOMY. 

neither  he  nor  any  impartial  observer  would  select  any  of  our 
protected  industries  as  furnishing  comparatively  glaring  in- 
stances of  our  want  of  a  high  moral  standard.  He  would 
select  rather  the  grain,  stock  and  oil  gambling  of  the  trading 
classes  and  the  management  of  some  of  our  great  railroads. 

§  310.  It  is  charged  against  our  protective  system  that  it  has 
resulted  in  the  destruction  of  American  commerce.  Objectors 
of  this  kind  use  the  word  "  commerce  "  in  the  narrow  and  con- 
ventional sense  which  has  been  affixed  to  it  by  English  writers, 
and  which  corresponds  to  the  situation  of  England.  They  mean 
by  it  the  export  and  import  of  commodities.  The  true  sense  of 
the  word  is  "  the  exchange  of  services  or  commodities  between 
persons  of  different  industrial  functions."  In  this  sense  Protec- 
tion is  a  great  promoter  of  commerce.  It  creates  variety  of  in- 
dustrial function  within  the  nation,  and  fosters  the  most  rapid 
and  continual  interchange  of  services  between  persons  thus  dif- 
ferentiated. It  promotes  association  between  members  of  the 
same  nation  by  producing  variety  in  their  employments ;  while 
Free  Trade  between  more  and  less  advanced  nations  always  has 
resulted  in  the  destruction  of  asssociation  among  the  people  of 
the  less  advanced,  and  in  their  reduction  to  a  monotony  of  occu- 
pation. There  is  no  vaster  commerce  in  the  world  than  that 
which  takes  place  between  the  fifty  millions  of  people  who  live 
inside  the  line  drawn  by  the  American  tariff,  and  who  are  grow- 
ing in  mutual  interdependence  with  every  year  of  its  existence. 

§  311.  As  was  said  in  the  tenth  chapter,  we  cannot  accept  the 
amount  of  exports  arid  imports  as  affording  any  fair  test  of  the 
country's  prosperity.  Such  a  test  could  have  been  devised  only 
in  a  country  which  had  made  itself  dependent  upon  others  for 
supplies  of  food  and  raw  materials,  and  for  customers  for  its 
manufactures.  But,  even  when  gauged  by  this  test,  America  is 
found  to  have  made  no  retrogression.  The  proportion  of  exports 
of  manufactures  to  the  population  was  greater  in  1880  than  in 
1860.  This  export  might  be  much  greater  if  we  took  the 
proper  steps  to  increase  it.  It  might  be  expected,  for  instance, 
that  the  nations  of  South  America  would  be  large  customers  for 


OUR  FREE  TRADE  IN  SHIPS.  363 

6^1  Twiaufactures.  We  buy  of  tliem  great  amounts  of  coffee, 
hidt»J  and  wool.  We  can  furnish  tliem  with  many  manufactures 
which  they  have  no  ambition  to  make  for  themselves,  and  in 
some  cases  not  the  resources.  But  our  chief  trade  with  that 
part  of  the  continent  is  conducted  in  English  ships,  which  go 
thither  with  cargoes  of  English  wares,  and  come  back,  by  way 
of  New  York,  with  cargoes  of  South  American  produce,  which 
they  replace  by  cargoes  of  American  wheat.  When  we  secure 
direct  commercial  intercourse  with  the  countries  which  have  few 
manufactures,  we  may  expect  to  find  foreign  markets  for  our 
own.  At  present  we  have  such  intercourse  only  with  countries 
largely  engaged  ui  manufacture. 

§  312.  It  is  charged  that  the  Protectionist  policy  has  debarred 
us  from  getting  our  fair  share  of  the  carrying  trade  of  the  world. 
But  American  citizens  are  free  to  own  and  sail  ships  built  in  any 
dockyard  of  the  world.  Our  laws  place  such  vessels  under  no 
disadvantage.  We  admit  ships  of  every  build  on  equal  terms 
to  our  pofts,  and  remit  many  of  the  charges,  such  as  lighthouse 
dues,  which  are  charged  in  the  ports  of  other  countries.  It  is 
true  that  by  a  law  passed  in  Washington's  first  administration, 
and  continued  in  force  by  every  party  which  has  been  in  power 
since  that  time,  ships  of  foreign  build  are  not  admitted  to  Amer- 
ican registration.  They  cannot  carry  the  American  flag,  and 
our  government  assumes  no  responsibility  for  their  safety.  But 
American  registration  confers  no  commercial  advantages.  On 
the  contrary,  it  brings  with  it  serious  disadvantages.  The  laws 
for  the  protection  of  American  seamen  impose  burdens  on  the 
owners  of  ships  in  our  registration  much  heavier  than  are  borne 
by  others.  Our  consulate  system  collects  far  heavier  fees  from 
them ;  our  systems  of  State  taxation  impose,  as  a  rule,  much 
heavier  fiscal  burdens  on  them;  and  in  return  for  these  the 
vessel  which  has  American  registry  receives  no  compensatory 
advantages.  The  nation  does  not  maintain  a  decent  navy  foi 
its  protection;  it  does  not  exert  itself  with  any  remarkable 
energy  in  the  defence  of  American  interests,  property  or 
citizens  abroad.      In  these  respects    it  is   much   behind  Eng- 


364  ELEMENTS   OF   POLITICAL   ECONOMY. 

land,  which  is  ready  to  continue  registration  and  efficient  pro- 
tection to  any  ship  which  Americans  may  purchase  from 
British  owners. 

In  fine,  we  have  absolute  Free  Trade  in  the  matter  of  mer- 
chant marine.  It  is  to  this,  in  great  measure,  that  we  owe  the 
decline  in  American  shipbuilding — a  decline  which  began  in 
1855,  six  years  before  the  Morrill  Tariff  was  enacted.  We  are 
almost  the  only  country  which  has  acted  on  the  laissez  faire 
maxim  in  this  matter.  Great  Britain  built  up  hers  by  a  system 
of  subsidies,  at  first  paid  openly,  afterward  under  the  cover  of 
payment  for  carrying  the  mails.  France  has  a  subsidy  system 
more  thorough  and  extensive  than  any  other  country  of  Europe. 
In  America  the  same  method  was  followed  until  1855,  when,  on 
recommendation  of  the  Senate  Committee  of  Commerce — Mr. 
Jefferson  Davis  was  chairman — subsidies  were  discontinued. 
Their  resumption  is  demanded  now  by  many  of  the  most  in- 
fluential commercial  bodies  in  America,  and  is  expected  from 
the  Congress  in  session  at  this  writing. 

§  313.  Protection  corresponds  to  the  purpose  of  the  Amer- 
ican people  to  be  a  complete  and  entire  nation,  at  peace  with 
every  other  in  so  far  as  in  us  lies,  desiring  no  advantage  at  the 
expense  of  any  other,  wishing  for  them  that  fulness  of  national 
life  which  we  desire  for  ourselves,  but  as  independent  of  their 
good  or  ill  will  as  the  resources  of  the  national  domain  will  per- 
mit us  to  be.  It  sometimes  is  denounced  as  irreligious  and  self- 
ish, but  only  by  those  who  have  taken  no  pains  to  understand  it. 
There  is  a  religion,  The  Saturday  Review  says,  which  became 
current  in  England  about  1851,  made  up  of  "Free  Trade  and 
the  pleasanter  parts  of  Christianity;"  with  that  religion  Pro- 
tection comes  into  conflict.  But  there  is  nothing  in  it  which  is 
inconsistent  with  the  Golden  Rule :  "  Whatsoever  ye  would  that 
men  should  do  to  you,  do  ye  even  so  to  them." 


CHAPTER  THIRTEENTH. 

The  Science  and  Economy  of  Intelligence  and 

Education. 

§  314.  In  presenting  what  have  been  found  to  be  wise  methods 
of  national  economy,  and  in  attempting  the  solution  of  economic 
problems,  it  has  again  and  again  been  pointed  out  in  the  fore- 
going chapters,  that  the  education  and  the  consequent  high  in- 
telligence of  the  people  is  essential  to  the  prosperity  of  a  nation. 

We  have  seen  that  an  agriculture  that  is  not  directed  by  scien- 
tific knowledge  is  wasteful  in  itself,  and  will  at  last  be  unable  to 
meet — much  less  to  outrun — the  ever-increasing  demand  of  the 
people  upon  its  productiveness.  Experience  also  shows  that,  so 
long  as  farming  is  conducted  in  an  unintelligent  way,  it  will 
never  be  anything  but  a  distasteful  drudgery,  which  will  drive 
the  best  young  men  of  the  agricultural  class  into  the  cities,  and 
to  occupations  that  employ  mind  as  well  as  muscle. 

We  have  seen  that  the  notion  that  ?a tor  will  always  leave  an  ill- 
rewarded  employment  for  one  that  is  better  paid,  is  disproved  by 
facts.  The  uneducated  farm-hand  of  Dorsetshire,  with  his 
mental  horizon  no  larger  than  the  visible  one,  shrinks  from 
pushing  out  into  an  unknown  and  untried  world  to  seek  his  for- 
tune, and  puts  up  with  ten  shillings  a  week,  when  a  few  shires 
farther  north  he  might  earn  a  competence.  The  Flemish  hoer 
works  for  a  half  or  a  third  what  he  might  get  a  dozen  miles  to 
the  south,  because  he  has  never  had  the  chance  to  pick  up  the 
small  amount  of  French  that  would  fit  him  to  labor  in  Brabant 
or  Brussels. 

We  have  also  seen  that  improvements  in  methods  and  in 
machinery,  by  discontinuing  the  employment  of  some  class  of 
workmen,  inflicts  great  injury  upon  that  class  if  its  average  of 
intelligence  be  low,  and  its  power  of  adapting  itself  to  a  new  set 
of  conditions  be  slight.     And  we  have  also  seen   that  all  these 


365 


36G  ELEMENTS   OF    POLITICAL    ECONOMY. 

improvements  make  a  larger  demand  upon  the  workman's  intel 
lectual  gifts,  and  can  only  be  carried  out  to  the  best  advantage 
where  these  receive  a  fair  measure  of  cultivation. 

It  has  also  been  seen  that  the  condition  of  the  working  classes 
is  capable  of  very  great  improvement,  through  the  adoption  of 
certain  metliods  of  economy — labor-banks,  cooperative  societies, 
building  societies,  and  the  like — which  demand  the  diffusion  of 
a  considerable  measure  of  knowledge  if  they  are  to  be  well  sup- 
ported and  wisely  managed. 

We  have  seen  that  the  sanatory  condition  of  a  community  is 
capable  of  very  great  improvement  only  when  the  conditions 
of  life  and  health  are  understood  by  the  people.  And  upon  this, 
as  has  been  said,  depends  in  large  measure  the  industrial  capa- 
city and  efficiency  of  the  people.  English  statists  estimate  that 
every  death  represents  one  hundred  and  sixty-six  days'  illness, 
during  which  the  sufferer,  if  a  working  man,  is  thrown  upon  the 
charity  of  his  friends  or  of  society  for  his  support.  The  conse- 
quent total  to  be  subtracted  from  the  productive  and  accumula- 
lative  powers  of  the  people  is  immense. 

We  have  seen  that  the  protective  policy  is  vindicated  by  its 
friends  and  conceded  by  its  enemies  to  be  a  measure  of  national 
education,  whereby  special  advantages  are  given  to  the  home 
producer  until  he  has  learnt  the  habit  of  manufacture  and 
acquired  skill  in  its  methods.  A  natural  accompaniment  of  such 
a  policy  is  an  active  national  effort  for  the  technical  training  of 
those  who  are  competent  to  receive  it. 

§  315.  These  and  other  considerations  like  them  lead  us  to  see 
the  importance  of  education  as  a  part  of  a  wise  national  economy. 
The  small  outlay  of  the  national  resources  that  is  necessary  to 
train  every  citizen  to  the  highest  rank  in  industrial  efficiency 
that  is  possible  to  him,  is  well  expended  in  the  purchase  of  a 
larger  gain  to  all  classes.  It  is  one  of  those  wise  sacrifices  of 
present  for  future  advantage,  which  distinguish  progressive 
societies  from  those  that  are  stagnant. 

But  a  national  education  can  never  be  a  merely  industrial 
education,— -can  never  be  even  first  and  chiefly  industrial.     The 


NATIONAL   EDUCATION   IN   ANTIQUITY.  367 

industrial  state  is  but  one  aspect  of  the  national  life,  and  an  edu- 
cation that  could  contemplate  only  its  ends  would  come  far  short 
of  the  training  required  to  fit  the  citizen  for  his  place  in  the 
body  politic.  It  would  also  defeat  its  own  ends  by  leaving  the  man 
undisciplined  in  many  duties  and  in  right  methods  of  thought, 
which  very  greatly  influence  his  industrial  worth.  On  the  other 
hand,  there  is  especial  need  to  call  attention  to  this  part  of 
national  education,  since  the  conception  of  the  nation  as  an  indus- 
trial state  is  quite  a  modern  one.  Napoleon  among  the  men  of 
practice  and  Fichte  among  the  thinkers — closely  followed  by 
Saint  Simon — were  the  first  to  recognise  its  truth.  And  as  in 
earlier  theories  of  national  life,  so  in  earlier  methods  of  educa- 
tion,* other  things  were  regarded  and  this  neglected. 

§  316.  A  National  Education,  limited  in  its  range  indeed,  but 
broad  enough  to  embrace  the  whole  scope  of  the  nation's  voca- 
tion, was  enjoined  upon  the  Jews  by  the  Mosaic  legislation. 
Especially  of  the  moral  law  it  is  said:  "These  words  which  I 
command  thee  this  day,  shall  be  in  thine  heart  [i.  e.,  thine  un- 
derstanding, thy  thoughts;]  and  thou  shalt  press  them  upon  thy 
children,  and  shalt  talk  of  them  when  thou  sittest  in  thine  house, 
and  when  thou  walkest  by  the  way,  and  when  thou  liest  down, 
and  when  thou  risest  up."  The  later  Jews,  at  a  time  when  the 
industrial  life  of  their  nation  had  attained  a  larger  development, 
required  that  every  father,  however  wealthy,  should  teach  his 
son  a  trade,  so  as  to  provide  against  all  contingencies  of  fortune 
and  enable  him  to  avoid  becoming  either  a  pauper  or  a  thief. 

In  Greece  we  have  two  great  methods  of  national  education 
standing  in  very  sharp  contrast.  The  Spartan  was  a  system  of 
military  discipline,  of  stern  and  unnatural  restraint.  It  was  the 
drill  of  an  armed  garrison  who  gave  up  their  individual  tastes, 
ideas  and  impulses,  and  submitted  to  an  all-constraining  law. 
The  death  of  the  three  hundred  at  Thermopylae,  "  in  obedience 
to  the  laws,"  was  the  crown  and  the  flower  of  the  life  of  the 
city,  which  produced  no  great  men  of  letters,  and  indeed  few 
great  men  of  any  sort.  The  Athenian  method  was  a  full  and 
free  development  of  human  nature,  especially  on  its  intellectual 


368  ELEMENTS    OF    POLITICAL    ECONOxMY. 

and  sestl  etic  sides.  In  Athens,  more  than  in  any  other  land  or 
time,  we  have  the  results  of  the  extension  of  the  finest  culture 
of  mind  to  the  whole  free  population  of  a  state.  Of  formal 
teaching  and  learning  there  was  comparatively  little,  except  the 
memorizing  of  Homer  and  other  poets  in  the  schools ;  the  new 
science  of  mathematics  seems  to  have  taken  its  name  from  the 
fact  that  it  was  the  first  branch  of  knowledge  that  was  not  picked 
up — like  reading,  writing,  grammar,  politics,  the  arts — from  one's 
fellow-citizens,  from  being  at  the  theatre,  or  from  the  daily  con- 
templation of  great  works  of  art,  the  sight  of  inscriptions,  &c. ; 
but  needed  to  be  learned  by  direct  and  formal  application.  Yet 
their  intellectual  education  was  perfect;  no  accumulations  of 
knowledge  or  improvement  of  methods  have  enabled"  any 
people  or  class  to  attain  a  higher  or  more  balanced  cultivation  of 
the  mind.  But  they  lacked  moral  balance  and  self-restraint,  and 
80  became  the  victims  of  their  own  cleverness,  as  Socrates  saw 
and  told  them. 

If  the  New  Testament  teaching  be  true,  both  these  opposite 
methods  were  right  and  capable  of  being  united,  because  there 
is  in  man  a  higher  or  spiritual  nature  which  education  is  to 
awaken  into  life  and  call  forth  into  activity  and  vigor ;  while 
there  is  also  in  man  a  lower  or  animal  nature,  by  which  he  must 
not  be  governed,  and  which  must  be  brought  under  restraint 
and  discipline. 

§  317.  The  Roman  inherited  the  Greek  method  of  education, 
but  never  gave  such  prominence  to  it.  The  Greek  governments 
were  systems  of  education ;  Roman  education  was  a  branch  of 
the  civil  service.  The  great  university  of  Alexandria,  the 
Mouaeion,  was  not  only  cherished  by  the  new  rulers,  but  repro- 
duced in  other  chief  cities,  especially  by  the  Athenaeum  at 
Rome.  In  lesser  places,  what  we  might  call  colleges,  professional 
chairs  and  schools  were  founded,  and  considerable  zeal  displayed 
for  the  education  of  the  higher  class  of  citizens.  But  the  learn- 
ing chiefly  cultivated  had  no  relation  to  the  practical  life  of  the 
times.  Much  attention,  for  instance,  was  given  to  rhetoric  and 
oratory,  although  all  real  use  of  these  had  disappeared  with  the 
ces*yition  of  free  popular  assemblages. 


MEDIEVAL    EDUCATION.  369 

Id  the  Byzantine  Empire  this  Imperial  system  was  perpetuated 
down  to  the  capture  of  Constantinople  without  the  slightest 
change  even  in  the  text-books.  Except  during  the  brief  period 
when  Julian  forbade  the  Christians  to  use  the  old  classics,  no 
Christian  literature  of  any  sort  was  admitted  to  the  schools  of 
the  Eastern  Empire,  and  the  use  of  the  Scriptures  in  such  a 
place  would  have  been  deemed  sacrilege. 

In  the  west,  Karl  the  Great  sought  to  trace  out  and  revive  the 
old  imperial  foundations  throughout  his  empire,  and  the  monastic 
schools  at  Fulda,  Aachen,  St.  Gall,  and  other  places,  were  prob- 
ably the  perpetuation  of  his  efforts.  More  important  still  was 
the  scliola  palafuia,  or  court  school,  which  he  made  an  adjunct  of 
his  household,  and  which  became  a  tradition  of  the  royal  court  of 
France.  It  was  afterwards  transplanted  to  the  new  capital,  Paris, 
and  it  enjoyed  the  service  of  many  able  men,  such  as  John 
Scotus  Erigena,  who  came  over  from  Ireland,  then  the  land  of 
Christian  schools  and  Christian  learning.  Karl  adopted  as  the 
basis  of  instruction  in  the  higher  schools  the  system  or  classifica 
tion  of  Boethius,  in  whicb  all  learning  was  divided  into  the 
seven  liberal  arts,  of  which  three  (the  trinum)  were  taught  in 
the  higher  classes,  and  four  (the  quadrivium)  in  the  lower. 
Hence  the  phrase  "  Master  of  Arts."  In  the  lower  schools 
reading,  writing,  arithmetic  and  singing  were  taught.  This 
classification  lasted  till  the  revival  of  classical  learning. 

Out  of  the  court  school,  or  the  ecclesiastical  school  which 
succeeded  it,  grew  the  University  of  Paris,  the  mother  and 
mistress  of  all  European  universities,  except  Bologna  and  Oxford, 
whose  possession  made  France  in  the  earlier  Middle  Ages  the 
Kingdom  of  the  University,  as  Italy  was  the  Kingdom  of  the 
Holy  See,  and  Germany  that  of  the  Holy  Roman  Empire.  The 
rise  of  the  University  was  so  very  gradual  that  the  steps  can 
hardly  be  traced,  but  at  the  time  when  Abaelard  was  drawing 
tens  of  thousands  of  pupils  to  Paris  to  hear  him  expound  the 
scholastic  philosophy,  and  partly  perhaps  through  his  great  suc- 
cess, the  University  had  taken  a  distinct  shape,  which  was 
chiefly  changed  by  the  division  of  the  profassors  into  separate 
24 


370  ELEMENTS   OF    POLITICAL    ECONOMY. 

"  faculties,"  and  the  students  into  '^  nations,"  and  this  formed 
the  model  after  which  others  were  erected  in  Bohemia,  Germany, 
Spain  and  Scotland.  These  institutions  were  hardly  instruments 
of  popular  education.  They  attracted,  indeed,  an  immense  body 
of  students  to  a  few  great  centres  of  culture  j  we  read  of  fort^ 
thousand  at  the  University  of  Oxford.  But  their  object  was  to 
form  a  learned  class,  not  to  reach  the  whole  people.  He  who 
received  it  betook  himself  to  a  new  sort  of  life  ;  he  did  not  go 
to  the  schools  to  learn  what  would  fit  him  to  fill  his  place  in  the 
class  in  which  he  was  born,  but  to  leave  that  class  and  enter 
another.  It  was  a  training  for  grown  men,  not  for  children. 
Only  monastic  schools  were  open  to  the  latter  in  the  earlier 
Middle  Ages ;  and  when  others  were  established  they  were 
chiefly  preparatory  to  the  universities,  and  imparted  a  highly 
abstract  and  artificial  training  in  a  very  tiresome  and  inadequate 
way.  They  were  generally  trivial  schools  in  which  were  taught 
the  arts  of  grammar,  music  and  arithmetic,  i.  e.,  the  Latin 
grammar  of  Donatus,  the  psalms  and  hymns  of  the  Missal  and 
their  ordinary  tunes,  and  the  elements  of  computation.  The 
only  Latin  literature  read  was  the  distichs  of  Cato  and  a  Latin 
version  of  ^sop's  Fables;  but  in  course  of  time,  the  Catechism 
(i.  e.,  the  Creed,  the  Lord's  Prayer  and  the  Decalogue)  were 
added.  Even  with  the  revival  of  the  study  of  classic  learning, 
no  change  was  made  in  these  schools.  Luther  went  to  school 
under  one  of  the  new  Humanists,  but  read  nothing  of  the  new 
literature  until  he  went  to  the  University. 

§  318.  To  the  Reformation,  and  especially  to  Luther,  popular 
education  owes  a  very  great  impulse.  In  some  sense  we  may  say 
that  it  began  at  that  date.  The  claim  put  forth  that  the  Bible 
should  become  the  people's  book,  and  the  efi'orts  to  circulate  the 
new  translations  of  it,  as  well  as  other  edifying  books,  involved, 
as  a  correlatyre,  a  general  effort  to  make  the  new  literature  ac- 
cessible to  the  common  people  by  a  general  diffusion  of  know- 
ledge. But  Luther  aimed  at  diffusing  a  national  education  that 
Bliould  be  truly  such.  In  his  appeals  to  the  German  cities,  urg- 
ing them  to  set  up  good  schools^"  not  such  as  have  been  hereto 


THE   REFORMATION   AND    EDUCATION.  S71 

fore,  where  a  lad  learned  at  his  Donatus  and  his  Alexander  for 
twenty  or  may  be  thirty  years,  but  never  learned  them  " — he 
especially  pleads  for  the  general  study  of  letters — "  good  poets 
jind  histories," — and  for  the  formation  of  city  libraries  of  all 
sorts  of  good  books  as  the  complement  of  the  schooi  system. 
He  would  have  the  chronicles  of  their  own  country  hold  a  promi- 
nent place  in  these  collections.  He  would  thus  provide  not  only 
a  competent  body  of  educated  men  for  the  service  of  church  and 
state,  but  also  "a  plenty  of  fine,  learned,  rational,  honorable, 
well-brought-up  citizens,*'  as  '*  the  best  and  costliest  possession 
of  a  city;" 

The  Calvinistic  Reformers  laid  still  greater  stress  upon  know- 
ledge and  intelligence,  as  needful  for  every  true  Christian.  It 
was  their  ideal  to  see  the  Bible  in  the  hands  of  a  community 
competent  to  understand  it.  In  Switzerland,  Germany,  Holland 
and  France,  they  carried  out  this  principle  with  great  thorough- 
ness, but  nowhere  more  completely  than  in  Scotland.  Knox 
and  his  associates  and  successors  worked  for  the  establishment 
and  endowment  of  English  and  Latin  schools,  and  the  improve- 
ment of  the  universities,  as  zealously  as  for  the  establishment  of 
the  Reformed  doctrines.  In  spite  of  some  temporary  defeats, 
they  carried  their  point,  and  the  Scotch  became  a  far  better 
educated  and  more  intelligent  people  than  their  richer  neighbors 
at  the  other  end  of  the  island.  In  England  the  Reformation 
was  a  measure  carried  through  by  the  government  and  the  aris- 
tocracy; it  was  not  so  democratic  in  its  character,  and  it  af- 
fected but  slightly  the  economic  condition  of  the  people.  The 
agitation  for  a  plan  of  popular  education,  to  reach  and  provide 
for  the  most  numerous  class — as  the  higher  and  middle  classes 
have  been  provided  for  by  old  foundations  and  private  schools- 
has  hardly  been  mooted  there  till  within  the  present  century. 
The  first  appropriation  of  money  for  the  purpose  was  the  vote 
of  £100,000  in  1847,  and  only  in  our  own  times  has  there  been 
adopted  a  plan  of  national  education  large  enough  to  reach  the 
whole  people.  It  has,  of  course,  been  opposed,  (1)  by  some 
few  consistent  free  traders,  like  Herbert  Spencer ;  (2)  by  those 


372  ELEMENTS   OF    POLITICAL   ECONOMY. 

religionists  who  regard  education  as  a  spiritual  function  and  deny 
the  power  of  the  state  to  exercise  such  functions ;  and  (3)  by 
those  who  object  to  the  existing  law,  because  it  takes  under  gov- 
ernment patronage  the  various  Church  schools  that  are  already 
established. 

Ireland  has  had  an  excellent  national  school  system  for  a  good 
many  years  past,  whose  effects  in  the  dissemination  of  intelli- 
gence forbid  us  to  ascribe  the  poverty  of  her  people  to  igno- 
rance.    They  take  rank  above  the  English  in  this  respect. 

Our  chief  authorities  for  the  history  of  education  in  the  old  world  are 
Prof.  Franz  Hoffmann's  Idea  of  a  University/  (translated  and  published 
in  the  Penn  Monthly  for  October,  1872) ;  Prof.  F.  D.  Maurice's  Lectures 
on  National  Education  (London,  1839),  and  his  Learning  and  Working 
(London,  1855)  j  and  Karl  JUrgen's  LiUher'a  Leben  (Leipsie,  1846). 

§  319.  American  education  was  begun  by  the  churches,  and 
the  higher  institutions  of  learning  nearly,  all  originated  with  the 
ecclesiastical  bodies,  as  most  of  them  are  still  under  their  control. 
The  University  of  Pennsylvania  was,  through  the  influence  of 
Franklin,  perhaps  the  first  to  arise  without  formal  connection 
with  the  churches.  The  colleges  and  academies  of  the  New 
England  States,  and  of  districts  settled  from  New  England,  were 
chiefly  modelled  after  Harvard  and  Yale,  and  drew  their  teachers 
from  those  mother  institutions  and  their  daughters.  Those  of 
the  Middle  and  many  of  the  Western  States  may  commonly  be 
traced  to  the  educational  efforts  of  the  Presbyterian  clergy  from 
the  north  of  Ireland  and  from  Scotland.  The  Puritan  and 
Presbyterian  elements  have  been  the  chief  agencies  in  our  higher 
educational  system,  and  in  both  cases  the  interest  and  the  motive 
was  ecclesiastical.  Religion,  it  would  appear,  was  the  only  force 
at  work  in  American  society  at  large  that  was  strong  enough  to 
overcome  the  American  passion  for  money-making,  to  insist  on 
the  excellence  of  a  liberal  education,  and  thus  to  cherish  the 
love  of  learning  and  of  science  till  it  grew  strong  enough  to 
Btand  alone.  Only  in  our  own  days  have  institutions  of  the  same 
character  been  endowed  in  a  few  places  by  the  state  govern- 
uients. 

§  320.  Schools  for  popular  education  were  very  early  cstab- 


OUR   PUBLIC    SCHOOL    SYSTEM.  373 

lislied  in  nearly  all  of  the  colonies.  Especially  in  Pennsylvania 
the  Society  of  Friends  was  most  zealous  in  establishing  elementary 
schools,  and  in  imparting  to  all  within  their  reach  the  elements 
of  a  good  English  education.  At  their  schools  in  this  city  many 
who  were  not  of  their  body  received  their  training,  and  it  is  very 
largely  to  the  influence  of  the  Quaker  element  thus  exerted  that 
the  Commonwealth  owes  the  solid  sense  and  practical  sagacity 
of  its  best  and  most  influential  elements.  But  the  system  of  state 
education  originated  in  New  England,  and  has  only  been  ex- 
tended to  other  parts  of  the  country  within  the  memory  of  per- 
sons now  living,  and  to  the  South  only  since  the  recent  war. 
The  progress  of  the  system  has  been  very  rapid,  and  it  is  now 
recognised  as  a  universally  established  principle  that  the  state  is 
responsible  for  the  existence  of  illiteracy  and  of  the  crimes  and 
violences  that  flow  from  ignorance.  The  system  is  opposed  (1) 
by  a  very  few  consistent  free  traders,  like  the  late  Grerritt 
Smith ;  and  (2)  by  some  religious  bodies,  which  regard  educa- 
tion as  a  spiritual  function  inhering  in  the  church. 

Less  can  be  said  for  the  quality  than  the  quantity  of  the  edu- 
cation given  by  our  public  schools.  Indeed  we  cannot  too 
heartily  recognise  the  fact  that  education  is  yet  in  an  experi- 
mental stage  among  us,  and  that  beyond  the  clear  duty  of  teach- 
ing a  few  of  the  first  and  plainest  elements  of  learning,  every- 
thing else  is  open  to  question.  We  have  too  often  forgotten  that 
education  is  a  means  merely,  a  very  flexible  means  to  any  end 
that  we  have  in  view,  and  that  we  must  first  fix  the  end  by  care- 
ful reflection  and  then  with  equal  care  adjust  the  means  to  the 
end.  Education  has  been  talked  of  as  if  there  were  something: 
magical  in  the  contact  of  a  young  mind  with  a  series  of  school 
books  and  of  teachers.  But  the  magical  results  have  not  been 
forthcoming. 

Especially  the  notion  that  education — the  imparting  of  know- 
ledge and  the  discipline  of  the  intellect — was  of  itself  sufficient 
to  abolish  all  crime,  has  received  a  decided  refutation.  There 
is  indeed  a  limited  amount  of  truth  in  this  notion.  Crimes  of 
violence,  for  instance,  as  Henry  Holbeach  says,  very  commonly 


374  ELEMENTS   OF   POLITICAL    ECONOxMr. 

grow  out  of  the  imperfect  communication  of  ideas  and  feelingf* 
between  uneducated  people.  Their  heartburnings  "  are  born  of 
imperfect  intelligence  of  each  other  in  dilemmas  of  conscience 
or  affectioi,  upon  which  such  poor  means  of  utterance  as  they 
have  are  thrown  away."  Hence  we  speak  of  quarrelling  persons, 
if  they  be  reconciled,  as  coming  to  an  understanding. 

There  is  also  in  the  discipline  of  the  school-room,  its  required 
order,  cleanliness  and  self-restraint,  a  powerful  moral  training 
for  the  young,  if  the  teacher  be  equal  to  the  task.  And  even 
the  mere  power  to  read,  in  the  great  preponderance  of  good 
literature  over  bad,  and  the  great  prominence  of  the  best  of  books 
in  modern  society,  is  pretty  sure  to  do  far  more  good  than  evil 
to  its  possessors,  taken  as  a  whole. 

Yet  our  excellent  fellow-citizen,  Mr.  Joseph  R.  Chandler, 
gives  it  as  the  result  of  his  fourteen  years'  devotion  to  the 
cause  of  prison-discipline,  "that  learning  has  little  or  nothing 
to  do  with  preventing  or  promoting  crime,  however  ib  may  influ- 
ence the  character  of  the  act.  .  .  .  While  in  the  lowest  order 
of  crime  I  may  have  found  more  unlettered  than  lettered  crimi- 
nals, I  have  found  the  former  more  amenable  to  gentle  moral 
dealing  than  the  latter  were."  But  this  generalization  is  not 
based  upon  a  comparison  of  two  societies  of  different  degrees  of 
intelligence,  or  two  stages  of  intelligence  of  the  same  society, 
and  is,  therefore,  hardly  justified.  Indeed,  the  fact  last  alleged 
in  its  support,  and  which  Mr.  Chandler's  authority  puts  beyond 
question,  points  to  exactly  the  opposite  conclusion.  The  edu- 
cated criminal  is  more  hardened,  because  his  fall  has  been 
greater;  he  "sinned  against  light,"  and  that  light  of  his  intelli- 
gence was  one  of  the  deterrent  forces  that  might  have  held  him 
back.  The  more  and  the  stronger  those  forces,  the  greater  the 
fall,  and  the  more  hardening  its  effect  upon  the  character.  Con- 
science, however,  until  enlightened  by  intelligence,  is  a  mere 
spur,  and  not  a  true  guide  in  life.  It  has  been^  when  un- 
enliglitened,  the  source  of  a  great  multitude  of  crimes  against 
hunian'ty.  There  are,  indeed,  cases  in  which  education  has  been 
»o  abstractly  intellectual,  so  devoid  of  all  moral  drift  and  tone. 


THE   MEANING    OF    NATIONAL    EDUCATION.  375 

that  the  conscience  has  been  almost  suppressed.  But  education 
may  easily  be  made,  or  rather  can  hardly  help  being  made,  verj- 
diflferent  from  that, — can  never  be  truly  national,  truly  in  ac- 
cordance with  the  very  first  notion  of  the  state,  without  being 
very  difierent. 

§  321.  Without  discussing  in  detail  the  merits  and  defects  of 
our  present  systems,  we  shall  seek  to  discover  what  idea  is 
rightly  conveyed  by  the  term  national  education.  This  term 
carries  us  back  to  the  idea  of  the  state  as  the  institution  of 
rights,  and  as  distinguishable  into  three  departments  of  national 
activity, — the  jural  estate,  the  culture  state  and  the  industrial 
state.  Manifestly  the  second  of  these  now  engrosses  attention, 
whereas  we  hitherto  have  been  chiefly  considering  the  third.  A 
national  education,  then,  is  (1)  one  that  develops  in  the  man  the 
intellectual  powers  and  capacities  that  fit  him  to  understand  the 
ideas  and  the  truths  that  are  the  common  possession  of  his  fel- 
low-citizens, and  that  fits  him  to  act  with  at  least  that  degree  of 
mental  freedom  that  his  nation  has  attained.  (2)  It  is  one  that 
impresses  upon  him  the  characteristics  of  an  upright  and  good 
citizen,  a  man  of  public  spirit,  and  a  devoted  patriot,  and  that 
fits  him  to  exercise  such  political  powers  as  are  intrusted  to  him 
by  the  constitution  of  his  country.  (3)  It  is  one  that  gives  him 
such  general  instruction,  and  ofi'ers  him  the  opportunity  to  ac- 
quire such  special  training,  as  will  fit  him  for  his  special  profes- 
sion, calling  or  industry,  and  will  enable  him  to  pursue  it  in  the 
most  effective  manner. 

§  322.  Firstli/,  education  to  fit  a  man  for  his  position  in  the 
culture  state  will  have  reference  to  the  rank  in  knowledge,  in- 
sight and  mental  power  possessed  by  his  own  nation.  The  pub- 
lic schools  of  China  or  Japan  should  not  give  lessons  in  German 
philosophy,  or  in  the  English  language,  or  any  language  but 
their  own.  Even  the  intellectual  growth  of  a  nation  is  chiefly 
from  within,  and  the  attempt  to  import  a  foreign  culture  by 
wholesale,  can  only  result  in  crushing  out  that  which  is  of  native 
growth,  and  in  retarding  the  normal  progress  of  the  people. 
It  will  merely  root  out  the  native  plants,  and  substitute  a  liortm 


376  ELEMENTS    OF   POLITICAL    ECONOMY. 

siccus  of  dry  and  dead  specimeDS,  without  sap  or  rout.  For  every 
country  possesses  a  certain  average  of  intelligence,  and  has  at- 
tained a  certain  stage  in  the  great  historical  march  of  the  human 
spirit  from  childish  subjection  to  manly  freedom.  And  as  the 
nature  of  that  march  is  governed  by  the  historical  constitution 
and  course  of  nature,  each  country  must  take  the  next  step  for- 
ward before  it  can  take  any  subsequent  step, — must  start  from 
the  position  that  it  now  occupies,  and  build  upon  the  foundation 
that  it  has  already  laid. 

Mr.  Palgrave,  the  English  art  critic,  for  instance,  expressed  his  fears 
that  Japanese  art  will  be  stopped  in  its  natural  course  of  development, 
through  the  imitation  of  foreign  models. 

The  language  and  literature  of  each  country  are  at  once  the 
perfect  expression  of  the  degree  and  quality  of  its  culture,  and 
the  means  of  education  in  conformity  with  that.  The  sure 
foundation  of  all  national  education,  on  its  national  side,  is  the 
study  of  the  native  speech,  through  books  that  record  it  in  its 
highest  and  purest  forms.  But  text-books  that  give  only  the 
result  of  such  studies,  and  teach  nothing  of  their  method,  such 
as  spelling  books,  school  dictionaries,  grammars,  manuals  of 
etymology,  and  the  like,  are  not  educational  instruments  in  any 
true  sense.  They  impart  information,  without  imparting  discipline ; 
they  give  no  impulse,  save  in  a  very  few  cases,  to  the  further  pur- 
suit of  the  same  studies,  but  rather  weary  and  disgust  the  student. 
They  do  not  render  the  service  that  all  rightly  directed  study  of 
a  language  through  its  literature  will  render,  in  training  the 
judgment  to  decide  between  greater  and  lesser  probabilities,  by 
the  problems  it  presents  as  to  the  meaning  and  connection  of 
words.  They  give  rather  a  phantasm  of  knowledge  about  words, 
a  mass  of  definitions  and  statements,  than  an  actual  acquaintance 
with  words  in  their  living  uses.  They  are  more  likely  to  hide 
from  the  student  than  to  declare  to  him  the  wonder  and  beauty 
of  the  language,  as  a  work  of  art  at  once  human  and  divine,  as 
the  result  of  a  great  process  of  education,  by  which  men  were 
led  on  from  the  sense  perception  of  things  material,  to  the  appre- 
heubiuu  uf  the  mure  real  and  less  tangible  verities  of  life. 


THE  NATIONAL  LANGUAGE  IN  EDUCATION.  377 

The  study  of  another  than  the  native  language,  especially  of 
a  language  of  the  same  family  but  of  earlier  date,  gives  a  great  ad- 
vantage, in  enabling  the  student  to  compare  and  contrast  the  two, 
and  suggests  to  him  open  secrets  that  would  otherwise  have  es- 
caped him.  Hence  the  great  use  made  of  Greek  and  Latin  in  the 
higher  education,  one  of  which  gives  the  most  perfect  illustration 
of  the  living  force  of  words,  the  other  of  the  laws  of  their  govern- 
ment, and  both  correspond  to  earlier  stages  in  the  world's  intellec- 
tual development.  Both  have  been  subjected  to  an  analysis  by 
great  scholars  that  has  extended  over  centuries,  and  are  therefore 
provided  with  an  apparatus  of  study  the  most  complete  possible. 

But  these  studies  cannot  be  introduced  into  our  public  schools 
generally,  chiefly  because  their  curriculum  of  study  is  not  pro- 
tracted to  years  in  which  these  could  be  efi'ectively  pursued. 
The  best  substitute  attainable  in  those  schools,  is  that  of  our 
own  language  in  its  earlier  stages,  as  presented,  let  us  say,  by  the 
great  English  classics  from  Chaucer  to  Milton.  That  literature 
is  as  much  the  heritage  of  the  American  as  of  the  English  people ; 
while  un-American  elements  may  be  traced  in  all  the  great 
writers  of  the  following  centuries,  those  earlier  masters  are  free 
irom  them.  And  they  furnish  a  long  series  of  noble  books, 
which  embalm  the  wisdom  and  the  excellence  of  lives  not  less 
noble.  With  wise  guidance,  and  not  too  elaborate  an  apparatus  for 
their  study,  the  scholar  might  learn  from  them  at  once  the  method 
of  studying  words  and  their  history,  and  the  personal  friendship 
for  great  authors,  which  constitutes  a  large  part  of  the  truest  cul- 
ture. But  mere  volumes  of  extracts,  however  excellent  for  some 
purposes,  will  not  answer  here ;  they  prevent  the  study  of  literary 
woiks  as  artistic  wholes;  they  do  not  ordinarily  give  a  full  ex- 
hibit of  the  state  of  the  language  at  any  one  era ;  and  they  cul- 
tivate the  habit  of  dipping  into  books  rather  than  continuous 
reading. 

There  is  another  language,  not  national  but  universal,  address- 
ing itself  not  to  the  understanding  but  the  heart  of  man — touch- 
ing fibres  of  his  human  nature  too  fine  to  vibrate  to  ordinary 
language, — fibres  that  lie  closer  to  his  very  self  and  deeper  thaa 


378  ELEMENTS    OF   POLITICAL    ECONOMY. 

his  ordinary  self.  Music  should,  in  the  opinion  of  Plato  and 
Milton,  form  a  part  of  human  education  ;  and  the  general  sensf 
of  mankind  has  assigned  it  a  very  large  place  in  the  great  up- 
lifting process  which  we  call  civilization.  The  hold  which  it 
has  taken  upon  the  working  classes  in  our  own  days,  especially 
in  England,  its  power  to  elevate  and  refine,  to  harmonize  and 
humanize,  to  remind  men  of  the  ideal  to  which  all  worthy  life 
is  ever  striving,  to  cheer  them  with  far-off  glimpses  of  it  amid 
the  sordidness  of  the  actual,  all  confirm  this  high  estimate  of  the 
human  use  and  worth  of  music  as  an  educating  force.  What- 
ever danger  there  may  be  in  an  excessive  devotion  to  it,  it 
should  be  made  a  subject  of  universal  training,  and  its  introduc- 
tion into  our  public  schools,  though  something  late,  is  a  most 
excellent  revival  of  what  was  once  a  study  practised  in  every 
school. 

Mathematical  science,  in  contrast  to  language,  represents  the 
most  general  form  of  intellectual  culture ;  it  calls  forth  and  disci- 
plines the  reason,  the  universal  intellectual  power,  which  belongs 
toman  as  man,  and  apprehends  not  probabilities  but  certain  and 
unquestionable  truth.  Arithmetic,  geometry,  algebra,  have  in 
modern  times  held  a  high  place  in  education.  In  our  schools 
arithmetic  is  not  taught  thoroughly,  because  after  a  slight  amount 
of  instruction  in  the  pure  science,  the  student's  attention  is 
diverted  to  its  application  to  commercial  computations.  A  more 
thorough  discipline  in  the  analysis  of  number  would  be  of  far 
more  use  even  in  practical  life  than  these  rules  and  methods, 
which  are  mostly  obsolete  in  our  counting-houses.  Geometry,  for 
the  same  veason  that  too  much  heed  is  given  to  what  is  thought 
practical,  is  either  entirely  omitted,  or  is  postponed  till  after  the 
student  lias  mastered  the  more  difficult  subject  of  algebra. 

The  ^jhi/Hical  sciences  are  a  means  of  education  only  when  pur- 
sued in  such  a  way  as  to  teach  their  methods  as  well  as  their 
r<^8ults.  The  latter  may  be  imparted  as  information  in  very 
large  c,uat»tities  without  the  student's  having  attained  any  real 
acquaintance  with  the  facts;  he  may  have  got  no  more  than  a 
uivLim  ol'  UKUiorized  definitions  and  statements,  and,  in  spite  of 


EARTH-LORE    AND    NEIGHBORHOOD-LORE.  379 

Bacon  and  all  who  have  followed  him,  may  mistake  these  for  the 
facts.  He  may  have  learnt  not  a  whit  of  the  patience,  self- 
distrust,  humility,  and  loyalty  to  fact,  that  characterize  the  true 
man  of  science,  the  original  investigator.  His  powers  of  attention, 
observation  and  accuracy  may  have  been  left  dormant  under  it 
all. 

These  objections  hold  with  great  force  against  the  branch  of 
physical  science  most  taught  in  our  schools,  and  the  method  by 
which  it  is  taught.  From  the  lowest  to  the  highest  schools,  and 
by  a  series  of  graded  text-books,  the  attention  of  the  pupil  is 
concentrated  upon  geography^  with  no  result  save  the  overloading 
the  memory  with  a  mass  of  statements  which  constitute  no  real 
knowledge  of  the  earth's  surface.  They  are  true  in  detail,  but 
the  whole  is  false  as  professing  to  be  an  adequate  account  of  our 
planet.  They  are  a  hindrance,  therefore,  to  real  knowledge,  as 
they  render  the  student  content  with  what  is  a  mere  phantasm 
knowledge.  He  mostly  learns  them  by  heart  without  any  reali- 
zing sense  of  their  meaning,  and  a  question  out  of  the  usual  run 
of  questions  often  displays  the  vacuity  of  his  mind  on  the 
subject. 

For  this  earth-lore  it  would  be  well  to  substitute  neighborhood- 
lore — or  the  study  of  those  facts  that  actually  fall  under  the 
scholar's  observation,  and  their  scientific  explanation.  The 
student  might  learn  the  geology  of  his  native  district  ]  its  rela- 
tion to  all  the  large  geographical  facts,  such  as  the  isothermal 
lines,  the  continental  formations,  the  sea  and  the  tides ;  its 
meteorology  especially,  its  weather-lore ;  its  natural  history  in  all 
its  branches,  with  incitement  to  collect  specimens  for  the  school 
museums ;  its  social  history  and  progress  from  the  days  of  the 
red  man's  wigwam  to  the  present  time.  Such  a  training  would  be 
in  the  line  of  the  providential  purpose  which  ordinarily  connects 
each  single  life  with  a  single  spot  of  earth ;  it  would  give  the 
mind  the  sense  of  a  hold  upon  the  world,  a  definite  place  and 
starting-point.  It  would  be  more  likely,  by  connecting  life  with 
knowledge,  to  be  the  first  stage  in  a  life  devoted  to  knowledge, 
than  if  its  youth  had  been  spent  in  loading  the  memory  witb 


380  ELEMENTS  OF   POLITICAL   ECONOMY. 

notions,  which,  however  real  in  the  knowledge  of  the   scient'sfc. 
possess  no  reality  for  the  scholar. 

And  to  come  still  more  close  to  the  student,  he  should  be 
taught  the  elements  of  practical  hygiene  in  connection  with  tha 
broader  physiological  laws  that  govern  health  and  disease.  There 
are  few  of  us  but  would  live  longer  and  more  healthful'  /  for 
such  self-knowledge ;  it  would  save  men  from  grave  mistaket  such 
as  often  embitter  a  lifetime  by  disease,  and  would  thereby  ada 
greatly  to  the  industrial  power  of  the  nation. 

§  323.  Secondly,  to  fit  a  man  for  his  place  in  the  jural  state, 
education  will  implant  in  his  mind  the  convictions  of  righteous- 
ness, of  justice,  that  underlie  the  national  order  and  the  laws  by 
which  it  is  prescribed  and  enforced.  The  state  is  the  organiza- 
tion of  the  whole  people  for  the  purpose  of  securing  justice; 
this  is  the  common  vocation  of  all  states,  and  except  as  they 
recognise  it  and  act  on  it,  they  are  unworthy  of  the  name  and 
forfeit  the  rights  of  nations.  The  elevation  of  the  individua 
citizen  into  the  true  national  consciousness  is  therefore  an  edu 
cation  in  righteousness,  in  uprightness, — and  the  means  of  re- 
straint upon  unrighteousness,  prohibitions  and  punishments,  are 
but  secondary  pohtical  agencies.  The  state  must  seek  first  of 
all  to  plant  the  right  seed,  and  secondarily  to  root  out  the  tares 

This  is,  thus  far,  only  incidentally  attempted  in  our  modern 
system,  through  the  influence  of  school  discipline,  the  enforce- 
ment of  order,  and  the  operation  upon  the  mind  of  studies  that 
aim  at  other  ends,  but  do  efi'ect  something  towards  this  end,  by 
familiarizing  the  mind  with  the  conception  of  law  as  the  under- 
lying principle  in  every  sphere  of  life  and  observation.  And 
indeed  it  is  by  indirect  teaching,  rather  than  by  the  imparting 
of  moral  information,  that  most  can  be  effected.  The  study  of 
the  lives  of  great  and  good  men  may  do  much ;  such  as  those 
biographies  in  which  Plutarch  has  preserved  for  us  the  life  and 
spirit  of  the  great  heroes  of  the  Greek  and  Roman  world.  And 
out  of  biographies  already  at  hand,  a  corresponding  book  might 
be  compiled  for  the  modern  period  and  written  with  the  same 
'*  universal  sympathy  with  genius"  (Emerson),  in  the  same  spirit, 


THE    OLD   TESTAMENT    IN    EDUCATION.  381 

of  genuine  enthusiasm  and  admiration,  and  convey  the  same  in- 
spiration of  enthusiasm  to  its  students.  Both  in  its  selection 
a»d  its  method,  it  should  contemplate  men  in  the  relation  of 
their  lives  to  the  life  of  the  state,  showing  how  their  virtues 
contributed  to  its  strength  and  its  freedom,  and  even  how  their 
vices,  faults  and  weaknesses  tended  to  weaken  and  enslave  it. 
It  should  be,  like  Plutarch's,  a  book  <'  crammed  with  life,'^  with 
"  genial  facility "  of  style,  the  embalming  of  noble  lives.  It 
should  stand  higher  than  his,  as  modern  society  stands  above 
ancient,  in  the  clearer  knowledge  that  "  righteousness  is  of  the 
essence  of  the  state  "  (Plato),  and  in  the  firmer  purpose  to  edu- 
cate students  into  that  devotion  to  it  which  is  the  truest  and 
highest  form  of  the  national  consciousness. 

The  best  text-books  for  this  training  are  wisely  written  histo- 
ries, and  of  these  the  finest  is  the  Old  Testament  history  of  the 
Jewish  nation,  which  is  especially  fitted  to  exemplify  the 
great  principle  that  is  to  be  here  inculcated, — that  the  divine 
call  laid  upon  every  nation  is  a  call  to  righteousness.  The 
national  literature  of  that  people  tells  how  a  family  became 
a  tribe,  a  cluster  of  tribes,  a  nation ;  that  the  law  of  righteous- 
ness was  disclosed  to  them  as  the  foundation  of  their  'national 
life;  that  their  experiences,  both  light  and  dark,  disclosed  to 
them  the  truth  that  they  were  a  strong,  united  and  living  people 
when  they  lived  by  it,  but  weak,  divided  and  dying  when  they 
lost  sight  of  it.  Especially  the  prophets  of  the  nation  stand  out 
prominently  as  the  interpreters  of  the  meaning  of  their  natian's 
history, — as  pointing  out  the  moral  order,  the  moral  "  constitu- 
tion and  course  of  nature,"  upon  which  the  nation's  life,  free- 
dom and  prosperity  depended.  Their  function  was  not  specially 
"  the  prediction  of  future  events  ;"  some  of  their  books  contain 
no  predictions  whatever,  and  those  that  occur  in  others  for  the 
most  part  flow  naturally  from  that  perception  of  "  the  laws  that 
circle  under  the  outer  shell  and  skin  of  daily  Ufe," — laws  at  once 
ethical  and  social — which  they  were  trained  to  observe  in  "  the 
schools  of  the  prophets."     Their  power  of  prediction  was  but 


382  ELEMENTS   OF   POLITICAL   ECONOMY. 

the  test  of  the  reality  of  their  science  of  the  moral  ordei  of 
society,  as  of  all  other  science  (§  2). 

The  Old  Testament  has  been  so  overlaid  with  allegorizing,  "  edifying/ 
and  other  unhistorical  sorts  of  commentaries,  that  its  political  significance 
has  been  obscured.  One  of  the  best  expositions  of  its  political  side  is 
given  in  Prof.  F.  D.  Maurice's  Prophets  and  Kings  of  ihe  Old  TeMament, 
(Am,  ed.,  Boston,  1854).  In  the  same  spirit  Sir  Edward  Strachey  has 
treated  the  prophecies  of  Isaiah  in  his  Hehreto  Politics  in  the  Times  of 
Sargon  and  Sennacherib,  (2d  ed.,  London,  1874),  and  Matthew  Arnold 
has  published  the  last  twenty-six  chapters  of  that  book  as  a  text-book  for 
schools  (  The  Great  Prophecy  of  Israel's  Eestoration). 

The  most  instructive  history  of  any  modern  nation  will  be  the 
one  that  most  closely  approaches  to  that  Hebrew  method  of  his- 
toriography,— not  by  any  affectation  of  style  or  the  lifeless  repeti- 
tion of  Bible  phrases,  but  by  the  application  of  the  same  princi- 
ples in  the  selection  of  the  representative  facts,  and  in  its  severe 
and  faithful,  though  friendly,  judgments  of  all  national  trans- 
actions. It  will  start  from  essentially  the  same  conception  of 
the  nature  and  the  calling  of  the  nation,  and  will  trace  the  same 
divine  hand  "shaping"  men's  "  ends"  for  purposes  that  they 
had  not  foreseen.  It  will  give  a  lasting  importance,  an  inex- 
haustible significance  to  the  transactions  of  temporal  affairs,  by 
connecting  them  with  the  eternal  principles  of  right.  It  will 
make  the  student  feel  that  his  calling,  as  a  member  of  a  nation, 
is  a  lofty  and  solemn  thing,  and  will  awake  him  not  only  to  the 
consciousnesi,  but  also  to  the  conscience  of  freedom.  It  will 
show  him  that  the  privileges  and  franchises  of  citizenship  are  a 
divine  trust,  a  stewardship,  and  his  abuse  of  them  a  crime  of  a 
very  high  nature. 

It  will  not  be  claimed  that  our  present  school  histories  are 
written  on  any  such  plan  as  this.  They  have  been,  for  the  most 
part,  modelled  more  after  the  Fourth  of  July  oration  than  the 
Hebrew  prophets.  They  teach  too  often  the  silly  vanity  of 
national  boastfulness,  instead  of  any  mere  ethical  lesson.  Asf 
the  sense  of  humor  has  been  developed  among  us,  such  teaching 
and  such  speech-making  have  turned  our  brief  but  honorable 
history  into  a  theme  of  jest  and  popular  merriment,  which  no 


CHRISTIAN   EDUCATION.  383 

longer  excites  the  imagination  or  rouses  patriotic  enthusiasm. 
Our  educated  classes  now  seek  in  other  lands  the  scenes  of 
historic  association  which  they  no  longer  find  at  home. 

§  324.  The  mere  instruction  in  righteousness  is  not  in  itself 
sufficient  for  the  formation  of  a  human  character  according  to 
the  standard  of  our  own  country.  The  legal  maxim,  Summum 
Jus,  summa  injuria,  has  its  truth  in  this  connection  ;  the  merely 
righteous  man,  the  just  man  whose  justice  is  a  hard  insisting  on 
all  his  rights,  an  exacting  of  his  own,  comes  short  of  perfect 
Tightness  or  righteousness,  and  is  often  guilty  .of  acts  which  the 
popular  conscience  pronounces  to  be  simply  wrong,  though  not 
technically  so.  This  is  so  because  we  are,  however  imperfectly, 
a  Christian  nation, — because  the  national  standard  of  character 
is  derived  from  the  Sermon  on  the  Mount  as  well  as  from  the 
Ten  Commandments.  That  Sermon  does  not  set  aside  the  old 
code  ;  it  only  complements  it  by  enjoining  upon  the  individual 
heart  and  conscience  a  spirit  of  meekness,  of  self-sacrifice,  and 
of  forgiveness,  which  counteracts  the  spirit  of  self-assertion  and 
hard  legalism,  which  would  bring  the  law  itself  into  contempt  by 
making  it  the  instrument  of  men's  selfishness  and  rapacity.  The 
old  basis  of  national  order,  the  stern  righteousness  that  demands 
"  an  eye  for  an  eye,  and  a  tooth  for  a  tooth,"  it  leaves  un- 
touched ;  but  it  guards  that  order  against  a  peril  involved  in  its 
own  nature  as  applied  to  the  affairs  of  imperfect  men.  And  it 
announces  these  injunctions,  not  as  applicable  to  some  special 
class  of  saintly  characters,  but  as  laws  of  the  kingdom  of  God — 
of  God's  government  of  men. 

The  New  Testament,  therefore,  either  in  or  out  of  the  public 
schools,  should  form  an  essential  part  of  the  education  of  the 
young  for  their  places  as  members  of  a  Christian  nation.  Its 
exclusion  from  those  schools,  even  if  it  be  taught  sufficiently 
elsewhere,  may  have  the  effect  of  sundering  its  lessons  from  his 
practical  life,  and  lead  him  to  suppose  that  the  book  is  a  mere 
"religious"  or  churchly  text-book,  whose  precepts  of  Christian 
courtesy,  forbearance  and  self-sacrifice,  concern  but  slightly 
his  relations  to  socie'^y  at  large.     The  chief  objections  to  its  in- 


384  ELEMENTS   OF    POLITICAL    ECONOMY. 

troduction  are,  we  believe,  based  on  misconceptions  of  its  real 
character,  many  of  which  are  due  to  those  who  have  come  to  be 
regarded  as  its  especial  custodians  and  interpreters. 

Even  «s  a  literary  work,  the  P]nglish  Bible  holds  such  a  place 
as  a  master-piece  that  no  course  of  education  can  be  complete 
if  it  exclude  it.  Its  phrases  have  become  the  proverbs  and 
household  words  of  the  people ;  ignorance  of  the  broad  outlines 
of  its  history  and  teachings,  ev«n  of  the  letter  of  some  especial 
parts,  consigns  a  man  to  social  contempt.  And  it  has  become 
entwined  with  all  the  other  classical  literature  of  the  language. 
Not  only  Milton,  Bunyan  and  Cowper,  but  even  Shakespeare, 
Scott  and  Byron  would  be  in  places  unintelligible  to  those  who 
have  no  acquamtance  with  it.  For  this  reason,  among  others,  the 
Hindoos  prefer  to  study  English  in  the  missionary  schools  where 
it  is  read,  rather  than  in  the  government  schools  from  which  it  is 
excluded.  They  also  resent  its  exclusion  from  the  latter  as  a 
piece  of  jealousy  similar  to  that  with  which  they  once  kept  the 
Vcdas  from  the  knowledge  of  Europeans. 

A  Roman  Catholic  writer,  the  late  Father  F.  W.  Faber,  says  of  the  Eng- 
lish Bible:  "Who  will  say  that  the  uncommon  beauty  and  marvellous 
English  of  the  Protestant  Bible  is  not  one  of  the  great  strongholds  of 
heresy  in  this  country  ?  It  lives  on  the  ear  like  a  music  that  can  never 
be  forgotten,  like  the  sound  of  church-bells,  which  the  convert  hardly 
knows  how  he  can  forego.  Its  felicities  often  seem  to  be  almost  things 
rather  than  mere  words.  It  is  part  of  the  national  mind,  the  anchor  of 
the  national  seriousness.  Nay,  it  is  worshipped  with  a  positive  idolatry, 
in  extenuation  of  whose  grotesque  fanaticism  its  intrinsic  beauty  pleads 
ttvailingly  with  the  man  of  letters  and  the  scholar.  The  memory  of  the 
dead  passes  into  it.  The  potent  traditions  of  childhood  are  stereotyped 
in  its  verses.  The  power  of  all  the  griefs  and  trials  of  a  man  is  hidden 
beneath  its  words.  It  is  the  representative  of  his  best  moments,  and  all 
that  there  has  been  about  him  of  soft,  and  gentle,  and  pure,  and  penitent, 
and  good,  sjicaks  to  him  for  ever  out  of  his  English  Bible.  It  is  his  sacred 
thing,  which  doubt  has  never  dimmed  and  controversy  never  soiled.  It 
has  been  to  him  all  along  as  the  silent  but  intelligible  voice  of  his  guardian 
angel ;  and  in  the  length  and  breadth  of  the  land  there  is  not  a  Protestant 
with  one  spark  of  religiousness  about  him,  whose  spiritual  biography  ia 
not  in  his  Protestant  Bible"  (Preface  to  Life  of  St.  Francis  of  Asaisi, 
1.S5.S). 

§  325.    ThlnUy^  The  state  should  give  in  its  public  schools 


AGRICULTURAL  EDUCATION.  385 

such  ^'eneral  instruction,  and  should  offer  in  special  technical 
schools  such  opportunity  of  special  and  technical  teaching,  as 
will  fit  its  memhers  for  their  places  in  the  industrial  state . 

How  far  this  should  include  the  training  of  the  members  of 
the  learned  professions,  including  teachers  in  public  schools,  we 
will  not  stop  to  inquire.  We  will  confine  ourselves  to  the  edu- 
cation of  the  persons  engaged  in  the  two  productive  industries, 
agriculture  and  manufacturing. 

A  scientific  agriculture  is  one  of  the  last  attainments  of  even 
enlightened  and  progressive  nations.  As  we  have  seen,  nations 
that  have  made  rapid  advances  in  all  the  other  arts,  lag  behind 
in  this,  importing  food  for  large  numbers  of  their  people  from 
abroad,  when  they  could  easily  have  raised  enough  and  to  spare 
at  home.  In  some  cases  this  is  partly  the  effect  of  a  bad  system 
of  land  tenure,  but  in  all  cases  the  defective  intelligence  and  the 
superannuated  methods  employed  in  farming  are  chiefly  to  blame. 
Since  Liebig's  great  discoveries  in  agricultural  chemistry,  it  has 
become  perfectly  possible  greatly  to  increase  the  yield  of  any 
given  area  of  soil  by  scientific  methods,  and  to  bring  under  profita- 
ble cultivation  the  most  unpromising  lands,  wherever  the  local 
market  for  food  makes  it  worth  while  to  employ  those  methods. 
But  even  in  such  situations  as  this,  the  farming  class  cling  to  old 
ways,  refuse  to  employ  the  same  foresight  and  enterprise  as  are 
essential  to  success  in  manufacturing,  and  jest  at  "  book  farmers '' 
as  a  set  of  enthusiasts.  Nor  are  they  so  much  to  blame ;  their 
comparatively  isolated  situation,  their  distance  from  the  great 
centres  of  intelligence,  and  the  imperfections  of  their  daily  edu- 
cation by  contact  with  other  minds,  render  them  a  very  con- 
servative class.  They  cling  to  old  traditions  with  great  tenacity. 
Two  bad  consequences  result.  (1)  A  divorce  of  experience 
and  enterprise.  The  experimental"  farming  of  the  country  is 
left  to  editors,  lawyers,  clergymen,  and  the  like,  who  have  far 
less  practical  knowledge  than  is  needed  for  the  undertaking. 
Their  enterprises  very  often — ^but  by  no  means  always — are  need- 
less failures ;    i.  e.  they  might  have  been  brilliant  successes  in 

the  hands  of  men  who  united  a  large  intelligence  with  a  large 
25 


386  ELEMENTS   OF   POLITICAL  ECONOMY. 

experience.  (2)  The  young  people,  who  grow  up  on  the  farm, 
learn  to  regard  agriculture  as  a  soulless,  mindless  routine  of  hard 
work,  with  no  chances  of  using  any  higher  power  than  the 
muscles.  They  carry  their  brains  to  the  best  market.  Some 
become  preachers,  others  politicians,  others  professional  men, 
others  merchants.  All  these  lines  of  activity  are  crowded  with 
men  of  more  or  less  intelligence  and  mental  power,  who  began 
life  in  a  farm-house,  and  might  have  been  more  successful  and 
useful  in  life  had  sufficient  inducements  been  offered  them  to 
end  it  there. 

The  technical  education  of  the  farming  class  should  begin 
in  the  public  schools,  and  with  the  earliest  years  of  study.  The 
neighborhood-knowledge  proposed  above  would  form  a  good 
introduction  to  it.  In  country  schools  that  teaching  should  take 
this  direction.  The  useful  branches  of  natural  history,  the 
nature,  history  and  habits  of  the  domestic  animals,  and  of  the 
cultivated  vegetables  and  the  agricultural  geology  of  the  district, 
should  be  among  its  themes.  The  child  should  be  taught  at 
once  the  rightful  respect  for  his  father's  mode  of  life  as  concerned 
with  the  most  valuable  of  human  sciences,  and  also  to  thirst  for 
a  more  extensive  acquaintance  with  those  sciences,  as  bearing  on 
that  occupation.  In  a  word,  the  school  should  be,  on  this  side 
of  its  life,  the  preparation  for  the  agricultural  college. 

In  the  college  the  students  should  receive  at  once  the  liberal 
culture  that  will  fit  them  to  associate  on  terms  of  equality  with 
educated  men,  and  the  special  scientific  and  technical  training, 
that  will  enable  them  to  practise  a  scientific  agriculture.  Of 
course  the  college  should  be,  at  the  same  time,  a  farm,  sufficient 
in  its  extent  and  its  variety  of  soil  and  of  situation  to  represent 
the  lands  upon  which  its  pupils  are  to  be  employed.  Study  and 
work  should  be  associated  in  its  management, — each  to  give 
direction,  dignity  and  practical  worth  to  the  other.  The  best 
stock,  the  most  improved  instruments,  the  most  thorough  methods 
of  tillage,  should  be  exemplified  on  the  farm ;  and  a  system  of 
experimental  agriculture  should  be  carried  on  as  part  of  i^s 
activities.     Above   all,  the  pupils  should  be  impressed  wit!    a 


THE   DEPARTMENT   OF   AGRICULTURE.  381 

sense  of  a  vocation,  firstly  as  farmers,  and  secondly  as  farmers 
of  education — as  therefore  in  some  degree  intrusted  witli  the 
education  of  their  class.  And  no  pains  should  be  spared  to 
impress  upon  the  farming  class  the  importance  of  such  a  patron- 
age of  the  institution,  as  will  make  it  a  power  to  promote  intelli- 
gence and  enterprise  in  the  community. 

Farmers  should  be  incited  by  state  and  county  fairs,  agricul- 
tural institutes  and  associations,  and  the  like,  to  meet  periodi- 
cally to  compare  past  results  and  devise  better  methods  for  the 
future.  Their  occupation  gives  them  leisure  enough  for  the 
purpose  at  some  seasons  of  the  year.  In  such  meetings  tho- 
roughly educated  farmers  would  soon  hold  a  prominent  place, 
and  become  themselves  the  educators  of  others.  The  influence 
of  the  technical  school  of  agriculture  would  be  thus  multiplied, 
and  would  leaven  the  whole  mass. 

The  order  of  the  Grangers,  or  Patrons  of  Husbandry,  recently  organized 
in  this  country  some  years  ago,  and  already  very  widely  extended, 
promises  very  excellent  results  in  this  direction  of  mutual  education,  pro- 
vided that  its  constitution  be  rigidly  adhered  to,  and  the  undertaking  be 
perseveringly  sustained.  But  mere  association  will  not  work  immediate 
wonders,  nor  change  at  once  the  material  thus  united,  and  there  seems  to 
be  danger  of  the  order  being  used  for  political  purposes  by  ambitious 
men,  or  smothered  under  the  meaningless  mummery  of  a  secret  association. 

A  governmental  department  of  agriculture  may  render  great 
services  to  the  farming  class,  not  only  by  the  collection  and  accli- 
matization of  foreign  plants,  seeds  and  animals,  and  their  distri- 
bution at  government  expense;  but  also  by  investigating  through 
consuls,  and  special  agents,  the  methods  of  foreign  agriculture, 
and  by  undertaking  investigations  and  publishing  information 
which  private  publishers  would  find  too  expensive.  There  are 
very  clear  limits  to  the  range  of  its  educational  activities,  but 
within  those  limits  there  is  much  that  can  be  done  to  great 
advantage. 

§  326.  Of  hardly  less  importance  is  the  technical  education  of 
the  other  classes  engaged  in  productive  industry.  The  era  of 
the  application  of  science  to  manufacturing  industry  maybe  said* 
to  have  begun  with  Napoleon  and  the  Continental  system,  when 


388  i:lements  of  political  economy. 

upon  the  French  and  German  savans  was  imposed  the  task  of 
discovering  substitutes  for  substances  which  could  no  longer  be 
obtained  from  abroad.  Up  to  that  time  the  arts  had  taken  the 
lead  of  the  sciences;  Watt  and  Arkwright  rather  furnished 
problems  for  scientific  investigation,  than  acted  on  the  guidance 
of  scientific  teaching.  But  now  science  began  to  point  out  new 
industrial  methods,  and  suggest  improvements  of  those  that  were 
traditional.  From  the  study  and  the  laboratory  came  forth  dis- 
coveries that  revolutionized  the  workshop.  Every  progressive 
and  intelligent  nation  is  emulating  every  other  in  their  adoption, 
and  changes  continually  occur  in  great  industries,  by  which 
old  methods  are  at  once  abandoned  and  new  substituted.  Work- 
ingmen  of  a  low  and  unintelligent  grade  have  not  the  power  of 
adaptation  needed  in  those  who  are  thus  giving  up  old  traditions 
and  adopting  new  ways.  The  onward  march  of  the  industrial  army 
will  be  greatly  hindered  if  its  troops  have  not  the  drill  and  the 
mental  equipment  that  fit  them  for  it.  And  that  equipment  is 
twofold.  The  man  must  have  received  such  general  training  as 
has  developed  his  judgment  and  his  powers  of  observation,  and 
must  have  a  large  measure  of  specific  knowledge  as  to  the  nature 
of  his  work,  and  the  materials  he  deals  with. 

So  rapid  are  these  changes,  that  there  are,  for  instance,  sugar  refine- 
ries in  our  own  country,  full  of  machinery  which  is  far  from  being  worn 
out,  but  which  is  simply  rusting  out  in  idleness,  because  the  discovery 
of  new  processes  for  the  extraction  of  sugar  from  molasses  has  rendered 
it  useless.  The  owners  could  not  afford  to  go  on  using  it,  and  will  finally 
sell  it  as  old  iron. 

§  327.  The  complexity  of  modern  manufacturing,  even  if  it 
were  thoroughly  un progressive,  makes  such  technical  training 
highly  desirable.  Things  are  attempted  in  modern  industry  that 
would  once  have  been  voted  impossible,  and  the  people  who  can 
do  the  most  of  these  impossible  things  takes  the  industrial  lead 
of  all  others.  The  resources  of  the  old  workshop  were  as  limited 
in  kind  as  in  extent;  its  workmen  plodded  on  in  a  dull  routine 
that  demanded  little  more  than  a  slight  cultivation  of  hand  and 
eye.  But  a  walk  through  a  modern  watch  factory,  will  show  what 
a  vast  number  of  technical  educations  have  been  expended  upon 


THE   INDUSTRIAL   EXHIBITIONS.  38S 

the  several  workmen,  and  to  what  thoroughness  these  have  been 
carried  in  each  case.  It  is  true  that  training  of  this  sort  is 
chiefly  the  work  of  active  life,  and  can  never  be  obtained  tho- 
roughly in  any  other  way.  But  it  is  also  true  that  very  much 
may  be  done  indirectly  to  qualify  the  man  for  his  work ;  much 
knowledge  may  be  given  him  that  practice  will  transform  into 
technical  expertness.  And  above  all,  by  showing  him  the  rea- 
son of  his  work,  as  well  as  its  method,  is  he  not  only  qualified 
to  act  intelligently  in  any  unforeseen  circumstances,  or  to  apply 
the  same  principles  in  any  new  method,  but  he  is  also  led  to  take 
a  deeper  interest  in  his  work,  and  to  do  it  with  more  diligence, 
— more  love  for  it. 

And  all  this  applies  with  tenfold  force  to  the  foremen  of  the 
workshop,  the  non-commissioned  officers  of  industry.  They 
hold  a  place  to  which  every  workman  should  be  taught  to  look 
forward  as  the  end  of  his  labors, — as  a  place  of  honor  as  well  as 
of  better  remuneration.  And  they  should  be  men  who  know 
the  "  why  "  as  well  as  the  "  how  "  of  every  industrial  process 
that  goes  on  under  their  oversight,  for  no  knowledge  short  of 
that  will  enable  them  to  meet  all  contingencies. 

The  great  industrial  exhibitions,  which  began  with  that  of 
London  in  1851,  have  opened  a  new  era  in  technical  education. 
The  Continental  nations,  taught  by  the  display  then  made  of  the 
great  staples  of  English  manufacture,  especially  metals,  turned 
their  attention  to  the  diffusion  at  home  of  such  technical  know- 
ledge as  would  fit  their  workmen  to  produce  the  more  elaborate 
and  costly  of  these, — those  sorts,  that  is,  in  which  the  value  is 
chiefly  in  the  workmanship  expended,  and  not  in  the  raw  ma- 
terial, much  of  the  latter  being  imported  from  England.  The 
results  were  visible  in  the  Paris  exhibitions  of  1855  and  1867, 
and  in  the  second  at  London  in  1862.  Each  new  comparison  of 
results  brought  new  humiliation  to  England,  and  even  in  1862  the 
conclusion  was  reached  that  before  England  courted  any  new  com- 
parisons of  this  sort,  she  must  do  great  things  for  the  education 
of  her  workmen.     But  1867  found  her  still  farther  in  the  rear, 


590  ELEMENTS   OF   POLITICAL   ECONOMY. 

and  h^ho^it  t.very  competent  judge  of  the  question,  who  expressed 
any  opinion,  united  in  that  of  Prof.  Tyndall,  "  that  in  virtue  of 
the  better  education  provided  by  Continental  nations,  England 
must  one  day,  and  that  no  distant  one,  find  herself  outstripped 
by  those  nations,  both  in  the  arts  of  peace  and  war/'  This 
opinion,  which  is  widely  shared  by  patriotic  Englishmen,  will 
mislead  us  if  we  ignore  tho  existence  of  other  elements  of  Eng- 
land's commercial  greatness.  English  competition  has  destroyed 
the  muslin  manufactures  of  Dacca,  and  the  carpet  manufactures 
of  Turkey,  in  spite  of  the  superiority  of  those  wares  to  anything 
of  the  same  sort  that  she  herself  produces.  But  as  intelligence 
and  taste  are  more  and  more  widely  diffused  in  those  who  use 
as  well  as  those  who  produce,  superiority  of  workmanship  be- 
comes every  day  a  larger  element  of  industrial  power.;  and  Mr. 
Scott  Russell  is  not  far  wrong  in  saying :  "  Should  the  day  come 
when  our  manufacturers  are  less  skilled,  less  informed,  less  able 
than  our  rivals,  the  flood  of  raw  materials  to  our  shores,  and  the 
back-current  of  manufactures  to  replace  them,  may  take  another 
direction  and  surge  on  other  shores.'' 

See  his  Systematic  Technical  Education  for  the  Erii^Uah  People ;  Lon- 
don, 1869. 

§  328.  The  technical  education  of  the  workman  is  especially 
required  for  the  production  of  those  articles  which  require  beauty 
of  form,  of  color,  or  of  design,  for  their  production,  and  in 
which  the  joy  of  the  artist  is  wedded  to  the  toil  of  the  artisan. 
Our  democratic  and  industrial  age  has  indeed  till  recently  laid 
but  little  stress  upon  the  beauty  of  its  industrial  products.  It 
has  cared  more  for  use  and  subtance,  and  less  for  beauty  and 
grace.  There  is  no  real  antithesis  between  the  two;  the  ele- 
gantly shaped  earthenware  from  Greek  and  Roman  kitchens  and 
sculleries,  with  which  we  fill  our  museums  and  adorn  our  mantels, 
served  their  every-day  uses  of  holding  salt,  oil,  or  the  like,  as 
well  as  do  the  ugly  shapeless  pieces  of  delft  that  now  take  their 
places,  and  they  had  cost  no  more  for  being  beautiful.  We  have 
not  had  common  things  about  us  made  in  beautiful  shapes  bo- 


ART   EDUCATION   FOR   THE   PEOPLE.  391 

cause  wc  have  not  cared  to  have  them, — because  out  minds  have 
lain  dormant  as  regards  the  whole  matter.  But  during  the  last 
forty  years  there  has  been  an  ever  accelerating  increase  in  the 
appreciation  and  love  of  the  beautiful,  and  in  the  hatred  and 
contempt  of  the  mechanical  pretences  at  beauty  that  once  con- 
tented us.  Our  Democracy  is  passing  out  of  the  Thersites  stage 
into  that  of  Pericles,  and  all  the  past  history  of  Democracy, bids 
us  expect  a  grand  era  of  the  fine  and  the  industrial  arts,  which 
have  always  lived  the  grandest  life  when  in  alliance  with  each 
other,  and  with  freedom  and  popular  government.  Especially 
in  our  industrial  age — whatever  may  be  the  future  of  the  fine 
arts — the  manufactures  that  approach  artistic  merit  and  ex- 
cellence may  be  expected  to  make  great  advances  upon  anything 
that  the  past  has  seen,  and  to  bring  the  finest  combinations  of 
form  and  color  within  the  reach  of  all  who  can  compass  even 
the  necessaries  of  life.  For  this  end  the  artisan  must  once 
more  become  the  artist;  for  all  true  art  in  every  nation  has  been 
born  in  workshops  which  were  also  studios,  while  it  has  been 
pampered,  corrupted  and  finally  destroyed  in  the  palaces  of  nobles 
and  kings. 

The  art  education  of  the  working  classes  becomes,  therefore, 
every  day  of  greater  industrial  importance.  In  England  es- 
pecially it  has  made  very  rapid  advances,  since  the  Great  Exhibi- 
tion of  1851  brought  to  light  the  general  inferiority  of  English 
goods — especially  glass  and  earthenware — to  those  of  the  Con- 
tinent in  this  respect.  Art  schools,  especially  night  schools  for 
workingraen,  were  at  once  established  in  all  the  large  towns,  and 
instruction  in  art  was  begun  in  public  and  other  schools,  and  the 
number  of  pupils  receiving  this  instruction  has  increased  with 
great  rapidity.  In  1866  it  was  over  a  hundred  thousand.  The 
results  were  at  once  visible  in  the  exhibition  of  1862  in  all 
articles  that  called  for  designing  and  decorative  art,  and  in  those 
that  require  in  the  workman  a  feeling  for  form  or  color,  and 
England's  great  progress  in  this  direction  was  confessed  by  Con- 
tineutal  observers,  while  her  decline  in   some  othe-s  was  very 


392  ELEML'NTS    OF    POLITICAL    ECONOMY. 

evident.  The  establishment  of  the  great  South  Kensington 
Art-Museum  is  the  last  measure  in  a  series  which  have  brought 
England  up  from  the  lowest  place  but  one  to  one  of  the  very 
highest  among  the  civilized  nations  that  apply  art  to  manu- 
factures. In  Germany  the  same  branch  of  industrial  education 
has  been  vigorously  pursued  throughout  our  century ;  and  their 
general  artistic  training,  aided  by  fine  fancy  and  exquisite  taste, 
has  kept  the  French  people  also  in  advance  of  their  insular 
neighbors.  America  lags  far  behind  all  these  countries ;  with 
us  artistic  knowledge  and  culture  of  every  sort  is  the  privilege 
of  the  iew,  instead  of  being  the  birthright  of  all.  We  are 
beaten  in  that  which  is  the  peculiarity  of  our  own  country,  and 
perhaps  our  national  vocation — the  transformation  of  sucli 
privileges  into  such  birthrights.  Hence  a  large  part  of  our 
work,  though  equally  costly  in  material  and  thorough  in  work- 
manship, ranks  below  the  corresponding  work  of  Europe  because 
of  this  defect.  And  what  work  of  another  sort  is  done  among 
us  is  either  by  workmen  or  after  patterns  imported  from  Europe 
for  the  purpose.  Nor  is  this  a  matter  of  indifference.  A  very 
considerable  amount  of  aptitude  for  art  lies  undeveloped  in  this 
unpicturesque  country  and  among  this  practical  people,  and  is 
chiefly  a  source  of  annoyance  and  torment  to  the  teacher  as  it 
finds  vent  in  all  sorts  of  irregular  ways,  whereas  it  might  be 
made  a  delight  and  a  benefit.  And  were  our  designers  and 
masters  of  ornamental  art  native  to  the  soil,  their  work  would 
be  far  better  adapted  to  American  tastes,  far  more  a  source  of 
pleasure  and  instruction  to  the  people  than  that  which  is  pro- 
duced by  foreigners  in  Europe,  or  after  their  naturalization 
among  us.  It  would  be  the  outgrowth  of  the  national  spirit, 
and  would  react  far  more  powerfully  upon  the  national  mind  in 
producing  refinement  and  elevating  thought;  just  as  Rodgers'a 
Btatuettes  have  done  more  for  us  than  Thorwaldsen's  Apostles 
could.  A  truly  national  school  of  art  would  then  become 
possible  to  us,  for  our  schools  of  design  would  serve  to  winnow 
out  the  really  artistic  minds  from  among  the  common  people,  and 


TRUE  AND  FALSE  ARCHITECTURE.        393 

give  them  a  sense  of  tlie  wortli  of  their  vocation  in  its  relation 

to  the  national  life. 

The  perfect  adaptation  of  wares  to  the  national  tastes  is  in  itself  a 
measure  of  protection  to  the  native  manufacturer.  An  English  dry 
goods  firm  sent  out  instructions  to  its  agent  in  China,  to  pick  up  well- 
dressed  Chinamen  of  difiFerent  classes  on  the  street,  and  buy  their  clothes 
ofiF  their  backs,  and  send  these  at  once  to  England.  From  these  sam- 
ples it  could  produce  goods  of  the  very  sort  that  the  Chinese 
wanted.  In  other  cases  the  traditional  costumes  of  European  peasants 
were  procured  and  imitated  by  English  firms,  with  great  success.  But 
in  a  progressive  society  where  a  really  cultivated,  and  at  the  same  time 
distinctively  natural  taste  exists,  and  where  the  change  of  fashions 
prevents  a  dead  uniformity  and  monotony,  such  an  imitation  would  be 
impossible. 

§  329.  Students  of  the  great  building  eras  of  the  past,  those 
that  produced  the  temples  of  classic  Grreece  and  the  cathedrals 
of  mediaeval  Europe,  will  never  be  equalled  until  the  distinction 
between  the  function  of  the  architect  and  that  of  his  workmen 
is  obliterated  by  raising  the  latter  more  nearly  to  the  leVfel  of 
the  former.  This  is  a  subject  of  great  importance  to  a  young 
country  like  the  United  States,  which  is  putting  hundreds  of 
millions  into  public  and  private  buildings  every  year,  and  ex- 
pects these  to  last  for  centuries.  The  advance  of  popular  taste, 
such  as  it  is,  has  already  shown  us  that  nothing  is  so  costly  or 
so  wasteful  as  ugly  architecture.  A  mechanical  lifeless  copy  or 
half  copy  of  a  Doric  temple  or  an  Italian  palace,  or  a  still  uglier, 
more  barn-like  building,  may  please  the  people  who  built  it  and 
be  not  offensive  to  their  neighbors  and  contemporaries.  But  the 
human  mind  wages  ceaseless  war  on  ugliness,  detecting  it  in- 
stinctively, becoming  more  sensitive  to  it  with  every  advance  in 
culture,  and  finally  abolishing  it  as  an  eye-sore  and  a  nuisance. 
All  work  that  is  not  the  best  of  its  kind  comes  into  collision 
with  this  subtle,  levelling  ftrce,  which  is  stronger  than  mortar 
and  brick,  or  stone  and  cement 

The  mere  spread  of  culture  and  taste  among  our  professional 
architects  will  only  half  solve  the  problem.  We  have  had  no 
real  architecture — Mr.  Ferguson,  the  very  highest  authority, 
tells  us — because  our  artisans  have  not  been  artists  also,  as  all 


39-i  ELEMENTS    OF   POLITICAL   ECONOMY. 

the  Greek  and  mediajval  stone-masons  were;  and  we  shall  only 
go  on  wastefally — building  in  one  generation  what  the  next 
will  overthrow — till  we  get  back  to  that  point.  This  is  surely 
the  largest  problem  in  the  technical  education  of  the  working 
classes ;  but,  after,  all,  it  is  only  an  extreme  case,  for  the  same 
principle  is  applicable  in  every  other  department.  Artistic 
beauty  is  the  crown  and  the  flower  of  all  the  reproductive  work 
of  man ;  and  to  make  the  artisan  an  artist — to  add  the  joy  of 
beauty  to  the  strength  of  toil,  is  a  problem  that  meets  us  on 
every  side  of  industrial  life.  Only  this  will  lift  the  life  of  the 
workman  out  of  its  sordid  wearisomeness,  and  make  it  tolerable 
by  making  it  noble. 

§  330.  The  industrial  education  of  the  people  should  be  con- 
templated in  the  common  school  system,  as  well  as  in  the  special 
technical  schools.  The  school-room  itself  should  be  an  educa- 
tion in  the  feeling  for  and  love  of  the  beautiful.  Communities 
and  artists  should  discern  that  there  is  no  higher  use  for  the 
best  artistic  faculty  that  the  community  possesses.  And  while 
there  should  be  a  general  training  in  drawing  for  all  scholars, 
there  should  be  a  special  winnowing  process  for  the  selection, 
with  a  view  to  the  further  training,  of  those  who  are  especially 
gifted  by  nature  with  the  artist's  eye  and  hand. 

And  the  neighborhood  knowledge  proposed  above  should, 
especially  in  our  cities,  take  in  the  great  local  industries,  their 
histories,  their  growth  and  their  methods,  and  whatever  else  is 
suited  to  awaken  an  intelligent  interest  in  the  student's  mind, 
and  lead  him  to  look  on  with  observant  eyes  at  the  work  that  is 
going  on  around  him. 

But  technical  schools  for  the  special  training  of  actual  work- 
ingnien  must  be  the  chief  dependence  in  this  respect.  There  is 
nothing  new  in  the  attempt  to  combifie  learning  and  working  in 
the  same  life.  It  was  once  the  rule  in  the  history  of  educa- 
tion, while  juvenile  education,  down  to  the  era  of  the  Reforma- 
tion, was  the  exception.  The  two  pursuits  are  not  in  each 
other's  way ;  each  may  give  new  zest  and  interest  to  the  other. 
Nor  need  the  workingman's  studies  be  confined  to   branches 


LEARNING  AND  WORKING.  395 

wti''^  will  be  of  direct  and  practical  use  in  his  work.  The  ex- 
perirz^-Qt  of  the  Workingmen's  Colleges  in  England  shows  that 
this  cl'^ss  arc  fully  able  to  receive  and  to  appreciate  what  is,  in 
all  essential  respects,  a  liberal  education,  and  that  not  with  the 
view  of  leaving  their  own  class  to  enter  what  is  socially  construed 
as  a  higher,  but  to  remain  in  it  as  its  educators  and  leaders — 
an  ideal  depicted  by  our  greatest  novelist  in  her  Felix  Holt. 

The  general  education  of  the  working  classes  in  all  those 
branches  of  learning  which  will  directly  conduce  to  their  industrial 
efficiency,  is  the  natural  complement  of  that  protective  policy 
which  has  already  been  advocated.  That  the  nation  should 
take  any  steps  in  this  direction  is  very  consistently  denied  by  a 
very  few  free  traders  like  Prof.  Thorold  Rogers,  but  in  Eng- 
land common  sense  has  always  counted  for  more  than  logic, 
and  very  large  outlays  of  national  funds,  as  we  have  seen,  have 
Decn  made  with  a  view  to  this  end.  She  has  gone  far  beyond 
our  own  country,  although  she  has  not  yet  overtaken  the  con- 
sistently protectionist  peoples  on  the  Continent,  who  are,  both  by 
restrictions  on  trade  and  by  the  schools  of  the  state,  training  their 
people  to  compete  with  her.  We  have  clung  to  the  former  but 
neglected  the  latter,  and  while  there  have  been  great  advances 
made  in  the  character  of  our  manufactures,  we  must  again  pro- 
nounce the  results  to  be  unsatisfactory  and  insufficient.  We 
can  do,  we  must  do,  greater  things  than  we  have  ever  attempted. 

It  is  beyond  the  province  and  the  powers  of  the  present  writer  to  dis- 
cuss the  details  of  the  problem.  He  knows  only  what  he  has  had  at 
second  hand  from  friends  and  from  books — especially  he  would  refer  for 
details  to  Mr.  Scott  Russell's  Systemafic  Technical  Education  of  the  Eng- 
lish  People,  and  Mr.  T.  Twining's  Technical  Training,  London,  1874. 


INDEX 


Att  vaZorem. «»  •ties,  defined,  231-2.     Their  eflFect  in  1846-54,  355-6. 

Agriculture.  Uuesnay's  view  of,  18.  Adam  Smith's,  19.  A  fundamental  in- 
dustry, 40,  90-1.  Its  historic  beginnings,  49-50,  69,  197.  Its  progress, 
70-2,  li3-4.  Intensive  and  extensive,  71-2,  237.  Benefited  by  the  neigh- 
borhood of  other  industries,  40,  46-7,  90-3,  212-7,  223,  235-6,  241-5,  259, 
263,  276,  291-3,  305,  311,  320,  327,  342,  352-3.  Needs  intelligence  and 
education,  83,  365,  385-7.  In  Germany,  72-3,  88-9,  122,  171-2,  323,  327. 
In  Italy,  48,  73,  90, 121.  In  England,  58-9,  74-83,  97,  122-3,  124, 129-30, 
130-1,  212-4,  259.  In  Belgium,  57,  72,  87-8, 171,  236,  319-20.  In  France, 
86-7,  97-8,  123,  171,  273.  In  Switzerland,  58,  89.  In  Spain,  73.  In 
Russia,  89-90,  124.  In  Scandinavia,  89,  113,  332.  In  America,  60,  92-3, 
109-113,  172,  215,  239-44,  263,  341-2,  343,  348,  350,  357,  385-7. 

Alcavala,  a  Spanish  tax,  183. 

Alcohol,  its  use  a  survival,  66.  The  heaviest  tax  on  the  working  class,  131-2. 
Taxes  on  it,  183,  184.     In  India,  314-5.     In  England,  302. 

Alleghenies,  their  settlement.  111. 

Annuities,  perpetual,  191-2.     Terminable,  192. 

Apprentices,  limited  by  Trades'  Unions,  135. 

Arbitration  between  capital  and  labor,  136,  139. 

Architecture,  true  and  false,  393-4. 

Argyle,  Duke  of,  108. 

Aristocracy,  its  oi-igin,  32-3.  Its  decay,  64.  Loss  of  power  in  England, 
282-3. 

Aristotle,  14,  1 5,  32. 

Arkwright,  128,  220,  281,  388. 

Art  in  relation  to  science,  11,  14-15,  23,  24,  267. 

Arts,  use  of  gold  and  silver  in,  145.  Fine  art  in  Japan,  376.  In  industrial 
education,  390-4. 

"  Arts,  the  seven  liberal,"  369. 

Ashburton,  Lord,  156,  166. 

Association,  man's  progress  to  and  by,  29,  32-6,  40,  49,  50,  70,  142,  143,  154, 
1^7,  216-7,  220-1.  Its  decline,  217,  223,  30J-2,  311-2,  334,  337-8,  341. 
Earliest  forms,  32-3,  73-4,  98,  219.  Of  labor  and  capital,  115,  123,  135-6, 
138-9,  254.     Of  workingmen,  25,  133-5,  136-8,  139-40,  202-3. 

397 


398  INDEX. 

Atmosphere,  the  great  storehouse,  43-5. 

Babbage,  138. 

Balance  of  trade,  mercantile  theory  of,  16,  209.     Say  on,  20,  21,  207.     Tooke, 

23-4,  207.     Its  .elative  importance,  151-2,  206-8.     Between  England  and 

Portugal,  334,  336.     Between  England  and  America,  343,  356.     (See  Pas- 

eivity  of  Money.) 
Bank-notes,  first  issued  at  Qenoa,  153.     Then  in  England,  153-4,  162-3. 

Their  uses,  154-5,  169-70.     "Over-issues,"  156,  165,173,175       Guaran- 
tees, 155-6. 
Banks,  their  rise,  153,  157.     Tieir  services,  154-6.     Their  functions,  158-62. 

Freedom  and  safety,  155-6,  170, 175.     Their  impolicy,  161-2, 164,  166,  173. 

In  Italy,  153,  157-8,  161,  162.     In  Northern  Europe,  153,  157,  158,  162, 

171,  171-2.     In  England,  162-8.     In  Scotland,  168-70.    In  France,  170-1. 

In  America,  172-8.      (See  Bullion,   Cash   Credits,   Clearing-house,   Credit 

System,  Discounts,  Money  of  Account,   Panics.) 
"Bank-screw"  in  England,  166-7. 
Banks,  land,  171-2. 
Banks,  people's  or  labor,  139-40. 
Bankruptcy,  forced  and  needless,  167,  173.     France  in  Law's  time,  170.     In 

America,  350,  354,  357. 
Barter,  the  first  form  of  trade,  15,  142,  152. 
Bastiat,  30, 126,  129,  266. 
Baxter,  Dudley,  211-2. 
Beet  sugar,  254,  272-3,  319,  322. 
Benedictine  monks,  14. 
Berkeley,  Bishop,  26. 
Bible  quoted :  Old  Testament,  35,  36,  49,  68,  73,  119,  202,  221.  367.     New 

Testament,  38,  39,  50,  190,  223,  368.     Its  place  in  education,  381-4. 
Bill  of  exchange  in  antiquity,  152.    Reinvented  by  the  Caursins,  152-3.    Its 

nature,  153.     Use  in  the  United  States,  177. 
Biography  in  education,  380-1. 
Black  death,  74. 
Blanqui,  21,  249,  253. 
BoUes,  Prof.,  26. 
Bowen,  193. 
Bo  wring,  312,  326,  328. 
Bright,  John,  187,  192. 
Brougham,  Henry,  348-50. 

Bullion  in  the  Bank  of  England,  165-7.     In  thai  of  France,  171. 
Bliring,  172. 
Burke,  20,  225. 

Bushnell,  Dr.  Horace,  227-8,  231,  347. 
Byles,  Judge,  31,  309. 
Caesar,  214,  283. 
Cairnes,  J.  E.,  25,  63,  149. 


INDEX.  399 

Capital  defined,  115,  307-8.  Its  growth,  55,  237-8,  260-1.  Its  fair  share, 
24-5,  115-6,  124-6.  Restrained  by  boundary  lines,  19.  Its  tyrannous 
power,  28-9,  200-1,  209,  222-3,  281,  301.  Its  responsibility,  120-1.  Ita 
relation  to  improved  agricultui*e,  72.  Its  policy  toward  labor,  119-20, 
132-9.  Is  benefited  by  varied  industry,  129,  237-8,  307-8.  Relative  ster- 
ility when  employed  in  foreign  trade,  205-6.  Should  legislation  change 
its  direction  ?  260-1.  Fertilizes  labor,  115,  123, 125-6, 135-6,  151-2,  154-5, 
207-8,  274.  England's  accumulations,  125,  149,  151-2,  168,  209,  212,  281. 
Ireland's  want,  130,  307-9.  Drained  out  of  Portugal,  334.  And  Turkey, 
339. 

Carpets,  Turkish,  336-7,  390. 

"Cash  credits,"  in  Scotland,  154-5,  169.     In  America,  204. 

Cattle,  first  form  of  property,  73—4,  142.  Early  use  as  money,  142,  143, 
Early  British,  101,  122.    Value  in  agriculture,  46,  72,  92,  244. 

Carey,  Henry  C,  29,  101,  126,  144,  294. 

Carey,  Matthew,  29,  173. 

Carlyle,  Thomas,  321-2. 

Caursins,  invented  bills  of  exchange,  152. 

Celibacy,  its  effects,  56,  65.     In  antiquity,  60-1.     In  America,  65. 

Census,  British,  62.     Irish,  62-3.     American  of  1870  and  1880,  358. 

Centennial  Exhibition,  358-9. 

Chalmers,  Dr.  Thomas,  23,  55,  288. 

Chase,  Salmon  P.,  176,  193. 

Checks  on  population,  54,  56,  65. 

Checks,  bank,  160,  163. 

Chemistry,  11,  15,  67.  Agricultural,  46,  59,  113-4,  385,  386.  Industrial, 
254-5,  272,  322,  387-8. 

Chevalier,  21,  149,  249,  250,  354. 

Cicero,  152. 

City,  its  history,  32-3.  Becomes  the  empire,  33.  Hated  by  the  Teutons,  33. 
The  closest  association,  142.     Duties,  52-3. 

Civilization,  its  material  progress,  29-30,  37-8,  40.  Is  normal,  not  excep- 
tional, 56-7.  (See  Differentiation  of  FuneHon,  Division  of  Labor,  Power 
over  Nature,  Progress.) 

Clay,  Henry,  234,  351,  352-3. 

Cleanliness,  its  promotion  by  law,  52-3,  67.     And  jtemperance,  132. 

Clearing-house,  anticipated  in  French  fairs,  160.  Adopted  in  Scotland,  160, 
169.  A  bank  is  one,  159-60.  Its  operations,  160.  Between  national 
banks,  176.     National  proposed,  177-8. 

Climate,  changed  in  England,  71.     Commerce  between  climates,  217. 

Clover,  its  use  in  farming,  45,  244. 

Coal,  its  origin,  44.    A  labor-saver,  69.    Ii-ish  and  English,  298.   Flemish,  318. 

Cobden,  149,  187,  192,  230,  273,  288,  330,  336. 

Coins,  origin  and  shapes,  143.  Of  various  substances,  148.  Superseded  by 
money  of  account,  157-8. 


400  INDEX. 

Coinage,  English,  under  Sir  Isaac  Newton,  163. 

Colbert,  17,  191,  209,  269-71,  273,  279. 

Coleridge,  S.  T.,  27,  28,  38,  79-81,  201,  253. 

Colwell,  Stephen,  30,  208,  356. 

Commerce,  definition  and  origin,  197.  True  sense  of  the  word,  362.  Trader's 
tax  on,  198-9.  Neighborhood  commerce,  199-200,  201-2,  216-7.  Distant, 
200-1,  210.  On  credit,  203-5.  Smith  and  Say's  theories  of  foreign, 
205-9.  The  present  English  theory,  209-16.  In  raw  materials,  214-6. 
True  and  false  commerce,  217-8.  Protection  makes  commerce  equitable, 
245-8.  French,  273,  274.  English,  281,  282,  284-5.  Australian,  296-7. 
Indian,  311-2,  German,  328.  Portuguese,  334-5.  Turkish,  336-7.  Amer- 
ican, 342-3,  348,  349-50,  355,  356,  357.     (See  Credit  System,  Trader.) 

"  Commodities  are  paid  for  with  commodities,"  20,  207-8,  334.  "  Gold  is  a 
commodity  like  any  other,"  149-52,  207-8. 

Commons  enclosed  in  Italy,  73.     In  England,  77-8. 

Community  in  land,  74,  75,  90,  98-9. 

Competition  highly  estimated  by  the  English  school,  19,  22,  287,  309.  Its 
relation  to  rent,  22,  93-5,  98-9.  Restricted  in  the  land  market,  96,  305-7. 
Limited  by  custom,  24,  74-5,  98-9,  118-9.  Does  not  always  adjust  prices, 
201,  202.  When  does  it  raise  wages?  129-30,  236,  303.  Attempts  to  su- 
persede it,  25,  136-8,  202-3.  Protection  promotes  it,  226-7,  233-4,  251-2. 
England's  competition  with  the  world,  213,  274,  281,  296-7,  301,  318,  323, 
330,  336-7,  350-1,  356.  French,  Belgian,  German  and  American  com- 
y  petition  with  England,  213,  233-4,  274,  284-7,  319,  328. 
^'Constitution  and  course  of  nature,"  12,  29,  31,  37-8,  230,  376.  Illus- 
trated in  the  history  of  soil,  41-8.  As  regards  population,  63-7.  Of 
human  nature  in  regard  to  wages,  119-20,  121.  As  regards  the  growth 
of  varied  industry,  219-21,  258-9. 

Constitution  of  the  United  States,  224-5,  265.     Industrial  motives  to  its 
adoption,  344. 
.    "  Consumer,  protection  discriminates  against  the,"  256-7,  289,  327. 

Continental  currency,  172. 

"fcontinental  system"  of  Napoleon,  254-5,  271-3,  281-2,  318,  323,  387-8. 

ContracJion  practised  arbitrarily  by  banks,  160,  161-2,  176.  In  England 
in  1783-1815,  and  later  panics,  164,  165.  Necessitated  by  Peel's  Bank 
Law,  166-7,  168.  In  Scotland,  170.  In  the  United  States,  173,  176,  193. 
Avoided  in  France,  171. 

Cooperation  in  production,  25, 136-8,  366.  In  housekeeping,  141.  In  trad- 
ing, 202-3. 

Copper  in  coinage,  148.     Cheapened  by  protection,  261. 

Copyhold  tenure  of  land,  74,  77. 

Coral  islands,  43. 

Corners  in  wheat,  200.     (See  Forestalling.) 

•'Corn  Laws"  repealed,  283,  284,  288.     Their  operation,  330,  350. 

Coamopolitical  school  founded  by  Adam  Smith,  19-20.     Its  disciples,  20-26. 


INDEX.  401 

Opposed  by  Fichte,  27.     By  Coleridge,  27-8.     By  List,  28-9.     By  Carey 

and  his  school,  29-31.     Their  view  of  nationalities,  230-1.     Their  theory 

of  commerce,  205-218,  228-9.     Of  the  sphere  of  the  state,  223-8,  289. 

The  expediency  of  protection  conceded  by  their  chief  authorities,  249-51. 
Cotton,  its  production  in  America,  215-6,  240,  243,  254,  263-4,  280,  346,  350, 

351.     In  India,  280,  311-2.     In  Turkey,  337.     Manufacture  in  England, 

215-6,  280,  284,  285,  311-2,  346.     In  India,  240,  255,  280,  311-3,  390.     In 

Germany,  326,  328.     In  Russia,  330.     In  Portugal,  336.     In  Turkey,  336. 

In  America,  263-4,  346,  350.     Whitney's  cotton-gin,  254,  281,  346. 
Credit  system,  159.     Objectionable,  203-5. 
Crime  and  education,  373-5. 
Cromwell,  Oliver,  83-4,  106,  277-8. 
Culture-state,  38,  375-80. 

Custom  as  an  economic  force,  24,  74^5,  86-7,  98-9,  118-9,  140. 
Customs,  in  England,  187,  283-4,  290.     (See  Duties  on  Imports.) 
Cutlery  manufacture  in  America,  210-1,  255.     In  England,  277. 
Dangerous  classes,  76,  120. 
Dearness,  artificial,  200.     Caused  by  protection,  but  only  temporary,  233, 

248,  251-2,  261.     A  relative  matter,  215-6,  241-2,  257-8,  263. 
Death-rate,  61-2,  67,  303. 
Degradation,  its  influence  on  population,  67-8,  303.     EflFect  of  low  wages, 

119-20.     Of  English  peasantry,  76,  78,  83,  95,  131,  212.     Of  the  Hindoos, 

311-2,  314-6.     Of  the  Turks,  337-41. 
Demesne  lands,  181,  185. 
Democracy  of  our  age,  115.     Its  rise  in  England,  288-9.     Relation  to  art, 

391. 
Demonetization  of  silver,  146-8. 
Density '^f  population  an  advantage,  49-50,  59-61,  68-9,  70,  96,  98,  100,  109, 

198.     Tts  natural  limits,  63-7.     In  different  countries,  57-8,  61,  87,  89,  98, 

320. 
Depopulation  of  the  Roman  Empire,  60-1,  67-8.     Of  places  in  India,  311. 

Of  Ireland,  63,  130,  302-3.  /\^ 

Deposits,  Bank;  their  origin,  159-60,  175.     Part  of  the  currency,  160,  165, 

175,  176.     Amount  under  bank's  control,  161,  164,  165,  165-6,  167,  168, 

171,  173.     Runs  on  them,  162.     A  substitute  needed,  161,  162,  203.     (See 

Discounts,  Money  of  Account.) 
Differentiation  of  function,  the  essence  of  social  progress,  37-8,  40,  43,  128, 

137,  142,  144,  145,  179-80,  197-8,  203,  216-7,  219-22,  238.     (See  Division 

of  Labor,  Uniformity.) 
Dilke,  Sir  Charges,  287-8,  295,  297. 
Discounts,  Bank,  158,  159,  164,  165-6,  173,  203,  204. 
Disraeli,  287,  288,  303. 
Distribution,  law  of,  on  increased  production  in  agriculture,  96-8,  122-3. 

Same  in  regard  to  labor,  124-6,  127,  122-4,  237-8.     English  theories  of, 

21-2,24,   54,   93-5,  116-7,  119,  133-4,  265.     The  existing  system   ques- 
26 


402  INDEX. 

tioncd  by  Mill  and  other  socialists,  24,  116,  264,  266.     Its  remediable  de- 
fects,  185-40,  201-3. 

Dividends,  taxes  on,  183. 
V  Division  of  labor,  a  part  of  social  progress,  15,  68,  70,  128,  197,  237,  345. 
Enabled  by  capital,  209,  237. 

Drainage,  natural,  of  poor  lands,  100,  108.  Artificial,  its  uses,  72,  102,  105 
106,  109,  110,  322. 

Drunkenness,  how  diminished,  132,  138.     (See  Alcohol.) 

Dufferin,  Lord,  300,  302,  303,  304,  305,  308,  309. 

Duffy,  Sir  Gavan,  85. 

Duhring,  Dr.  E.,  30,  266. 

Dunbar,  Prof.,  26. 

Dureau  de  la  Malle,  60. 

Duties  on  imports,  and  their  incidence,  231-5,  248.  On  raw  materials, 
239-40,  256,  346.  Their  object  and  ultimate  effects,  251-2.  Reme- 
dies for  excessive,  361.  (See  Ad  valorem,  Deamesg,  Protection,  Specific, 
Tariffs.) 

Earthenware,  why  called  delf,  275.     Manufacture  in  Germany,  328. 

Economistes,  school  founded  by  Quesnay,  17-8.  Adam  Smith's  relation  to, 
19.    Divorce  science  from  art,  29.     Turgot  represents,  18,  271. 

Economist  (London)  quoted,  284,  313. 

Economy,  not  always  parsimony,  14-5,  119-20,  124,  211-2,  227-8,  235. 

Edinburgh  Review,  124,  186-7. 

Education,  Malthusian  hopes  from,  55,  56.  Promotes  longevity,  67.  Pro- 
moted by  good  wages,  120.  Diminishes  drunkenness,  132.  National  is 
threefold,  375.  (1)  For  culture  state,  375-6.  (2)  For  jural  state,  380-4. 
(3)  For  industrial  state,  in  agriculture,  384-7.  In  the  arts,  387-95. 
State  provision  for,  180,  224,  229-30,  248-9,  286,  366-7,  373-4,  384-5, 
395.  Neglect  in  England,  83,  371-2.  Ancient  education  (Judca,  Greece 
and  Rome),  367-8.  Mediaeval  (Eastern  Empire,  France,  Germany 
and  England),  71,  369-70.  Modern  in  Europe,  370-1.  In  America, 
372-5. 

Edward  III.,  276. 

Elder,  William,  20. 

Elizabeth,  Queen,  72,  83,  106,  277. 

Emerson,  110. 

Enclosures,  73,  75,  76,  77,  99. 

Equality,  natural  tendency  to,  29,  238,  260,  265-6,  327.  Hindrances  to,  30, 
78,  168,  189,  201-2, 

Equilibrium  of  the  industries,  the  goal  of  industrial  growth,  27,  30,  90-3, 
212,  259.  Destroyed  in  England,  78,  80-1,  212,  213-4,  259.  Not  attained 
in  America,  91,  92-.3,  212. 

Eveninrj  Post  (New  York),  quoted,  236-7,  247. 

Everett,  Edward,  346. 

Evictions  in  Scotland,  85-6. 


INDEX.  403 

Exchequer,  Notes,  164. 

Excises,  when  first  imposed,  185.     Enormous  growth,  186-7.     Recent  reduc- 
tions, 186.     Revenue  from,  291.     (See  Internal  Revenue.) 
Exhaustion  of  the  soil,  46,  243-4,  304. 
Exhibition  of  1851,  389,  391.     Of  1855,  389.     Of  1862,  389,  391.     Of  1867, 

389-90.     Of  1876,  358-9. 
Exports,  no  test  of  prosperity,  217,  262,  362.    England's  most  valuable,  go  to 
Protectionist  countries,  246-7,  296-7.     Does  protection  prevent,  262.     In- 
crease and  modification  through  protection,  273,  327,  328. 
Factory  system  invented  by  Arkwright,  128,  220,  281.     Its  benefits,  128,  220, 
330.      Not  applicable  to  agriculture,  81.      Calls  for  technical  training, 
388-90. 
Family,  the  first  form  of  society,  14,  32,  143,  219,  381.     Its  surrender  of  in- 
dustries, 141.     Extinction  of  old  families,  64-5. 
Famine,  characteristic    of  thinly-settled  regions,  59-60.     Hunter's  specific 
against,  60.     In  antiquity,  61.     In  Ireland,  59-60,  62-3,  109,  302-4.     In 
India,  312. 
Farmer,  man's  third  stage  as  food-producer,  68,  69.     History  in  England, 
74-8.     Needs  direct  protection,  239-40.     Benefited  by  variety  of  industry 
90-3,  214-5,  240-5,  350.     Needs  special  training,  385-7.    (See  Agriculture, 
Grain  Trade.) 
Farming  the  revenue,  189-90,  269. 

Fashions  worth  more  than  mines  to  France,  279.     Should  be  national,  392-3. 
Fawcett,  131,  238-9. 
Ferrara,  30,  126. 

Fertility  of  soil,  a  great  process,  42-6.     May  be  destroyed  by  exhaustion  or 
-      denudation,  46-8,  244.     Of  midland  England,  106.     Of  Ireland,  107,  109, 
297.     Of  Southern  Illinois,  112. 
Feudal  system,  an  enemy  of  national  unity,  34,  179,  221.     Its  land  tenure, 
74-5,  79,  86-7,  97.     Its  villeinage,  74,  88-9,  122-3.     Its  tenures  and  ser- 
vices abolished  in  England  at  the  Restoration,  77,  79,  186.     In  Prussia  by 
Stein,  88-9,  122. 
Fichte,  J.  G.,  20,  27,  221,  367. 
"Fields"  of  the  Mark,  74,  75,  76,  197. 

Finance;  bad  methods  of  early  periods,  17,  180-1,  189-90,  268-9,  271,  276. 
Moslem  finance,  189,  313,  316-7,  337,  339.  French  policy,  170-1,  191, 
269-70,  271.  German,  321,  322,  323,  324,  325,  326.  English,  162-3,  183, 
185-7,  189,  190-1,  191-3,  229-30,  276,  283-4,  291.  American,  176-7,  181, 
183,  184,  185,  188-9,  193-6,  227-8,  229-30,  248-9,  344-5,  347,  352-3,  354, 
357.  Canadian,  290-2.  East  Indian,  313-7. 
Folkland,  73.     (See  Commons,  Enclosurett,  Mark.) 

Food,  a  prime  necessity,  41-2.  Man's  progress  as  its  producer,  68,  70-2. 
In  Greece,  115.  In  ancient  Italy,  73,  115.  In  France,  97-8,  123-4,  273. 
In  England,  58,  59,  71-2,  82,  83,  101-2,  122,  187,  212,  213,  241-2,  259,  277, 
302-3.     In  Ireland,  62-3,  109,  130,  302-3.     In  Belgium,  87-8,  320.     U 


404  INDEX. 

America,  92-4,  112,  239,  243-4,  341-2,  348,  356.      In  India,  312,  314, 
315. 

Foreign  commerce.     (See  Commerce,  International  Exchanges.) 

Forestalling  the  market,  the  method,  200-1.  As  practised  in  Chicago,  200. 
In  Australia  and  California,  200,  296. 

FoTtnighthj  Review  {London),  200,  226-7,  297. 

Fourier,  199. 

Franklin,  Benj.,  18,  65,  242-3,  342,  372. 

Frederick  the  Great,  171,  190,  272,  321-2. 

Free  banking,  155-6.     In  Scotland,  169.     In  Rhode  Island,  174-5. 

Free  contract,  English  faith  in,  19,  119,  307.  Does  not  extend  to  land,  23, 
70,  96,  305-7.     (See  Competition,  Custom,  Socialists.)  • 

Freedom,  the  nation's  aim,  35,  39,  376.  It  increases  with  closeness  of  asso 
ciation,  68,  220-1.  Declines  with  its  decline,  221,  306,  341.  Industrial 
freedom,  225-7,  306. 

Freeholders,  75. 
'{  "Free  Trade,"  proposed  by  the  Economiates,  18.  By  Adam  Smith  and  Say, 
19,  20,  206,  207-8,  260-1,  272.  By  Torrens,  Ricardo,  and  Mill,  22-3, 
209-10.  Opposed  by  Fichte  and  List,  27,  28-9.  Based  on  the  Laissez  /aire 
theory  of  the  state's  functions,  19,  223-6,  264-7,  287,  289,  309,  355.  In- 
jurious between  countries  of  unequal  industrial  status,  222-3,  301,  310-2, 
329-30,  334-5,  336-7.  Means  mostly  the  exchange  of  raw  materials  for 
manufactured  goods,  212-3,214-6,  246-7,  263,  280,  291,  303,  311.  Removes 
across  the  ocean  the  points  where  their  prices  tend  to  converge,  215-6, 
240-1.  Means  uniformity  of  occupation  in  the  weaker  country,  212-3, 
215-6,  217,  235-6,  237,  238,  239-40,  242,  253,  295,  301-2,  303,  309,  311-3, 
318,  329-30,  334^5,  337-8.  Involves  a  bad  economy  of  the  weaker  nation's 
labor,  129-30,  211-2,  215-6,  235-6,  237,  254,  295,  298,  302,  303,  306,  311, 
312,  320,  332,  334-5,  337-8,  344,  354.  Involves  bad  and  wasteful  farming, 
90-3,  214-6,  237,  239-45,  263.  Involves  an  unfavorable  balance  of  trade, 
206-8,  258,  260,  329-30,  334-5,  337,  339,  356.  Rejected  by  great  states- 
men :  by  Colbert,  269-70.  By  Napoleon,  271-.3,  281-2.  By  Edward  III., 
276.  By  Elizabeth,  277.  By  Cromwell,  277-8.  By  Frederick  the  Great, 
321-2.  By  Joseph  II.,  322.  By  Alexander  I.  and  Count  Nesselrode,  330. 
By  Gustavus  Adolphus  (see  Hausser's  Period  of  the  Reformation,  p.  455). 
By  Count  Ericeira,  334.  By  Fisher  Ames,  344.  By  Gen.  Washington, 
344,  345.  By  Alex.  Hamilton,  27,  29,  344,  345.  By  Thomas  Jefferson,  347. 
By  James  Madison,  350.  By  President  Monroe,  351.  By  Henry  Clay, 
351,  352-3,  353.  By  Daniel  Webster,  352.  By  John  C.  Calhoun,  350. 
By  Andrew  Jackson,  243,  353.  By  Gen.  Harrison,  354.  Rejected  by  pro- 
gressive countries :  by  Greece  and  Rome,  267-8.  By  France,  269-75.  By 
England  till  1845,  275-81.  By  the  English  working  classes,  288-9.  By 
the  Australian  colonies,  294r-7.  By  Belgium,  317-20.  By  Germany,  320-9. 
By  Russia,  329-31.  By  Sweden  and  Denmark,  331-2.  By  Spain,  332-3. 
Adopted  by  England  after  five  centuries  of  protection,  281-5.      The  act 


INDEX.  405 

of  tho  middle  classes,  now  to  be  judged  by  the  working  classes,  282-9. 
Adopted  by  Canada,  290-3.  By  Prussia  temporarily,  323-4.  By  Russia 
temporarily,  329-30.  By  Portugal  for  one  hundred  and  fifty  years,  334-6. 
By  the  United  States  by  default  of  legislation  till  1824,  347-51.  Again 
for  political  reasons  in  1833-42,  353-4.  Again  partially  in  1846  and  1857, 
355-7.     Forced  on  Ireland  in  1801,  301.     On  India  in  1813,  310-3. 

Free  traders,  if  consistent,  oppose  national  education,  248-9,  371,  373,  395. 
And  national  post-offices,  248.  Are  too  moral  to  engage  in  protected  man- 
ufactures, 247.  Generally  belong  to  the  servile  party  in  politics,  226,  294. 
Are  liable,  by  reaction,  to  become  communists,  265-6.  Have  no  faith  in 
the  principle  of  nationality,  230-1.  Their  ablest  men  concede  the  tempo- 
rary expediency  of  protection,  249-51.  Admit  that  protection  creates  no 
monopoly,  252.  Seven  of  their  objections  to  protection,  256-266.  Are,  in 
England,  the  middle  class,  282-3.  Are  not  open  to  argument,  287,  288. 
Their  conspiracy  with  Napoleon  III.,  273.  Their  defeat  in  Germany,  324-5. 
In  Belgium,  318.  In  Russia,  330.  In  Portugal,  336.  Their  defeats  in  the 
United  States,  351,  354-5,  357-8.     Their  league  with  the  Slave  power,  357. 

Frontiers,  Custom  House,  inside  nations,  17,  322,  323,  324,  332,  333,  344. 

Fullarton,  on  Currency,  156,  166. 

Funding  national  debts,  191-2,  193,  229. 

Gee,  on  Trade,  342. 

Geography  in  education,  379. 

Gladstone,  W.  E.,  96,  183,  187,  192,  273,  283-4,  287,  307. 

Goethe,  20,  37,  43,  254. 

Gold,  why  adopted  for  coinage,  and  when,  142-3.  Its  advantages  and  dis- 
advantages, 144.  Probable  effects  of  its  demonetization,  27, 145.  Its  sup- 
ply, 145.  Does  not  circulate  in  the  East,  148.  Its  increase  in  the  circula- 
tion and  the  eflFect  on  its  value,  23,  148-9,  151,  207-8.  English  legislation 
about  it,  165.     (See  Bullion.)     French  practice,  171. 

Goldsmiths,  English,  used  to  act  as  bankers,  153,  162,  163. 

Government,  its  development  through  the  differentiation  of  function,  37-8, 
179-80.  Its  function  to  steer,  36,  225.  Its  sanatory  responsibilities,  50-3. 
Its  growing  need  of  revenue,  180,  229-30.  Its  earlier  methods  of  getting 
it,  180-1.  Its  methods  of  taxation,  181-90.  Its  debts,  190-3.  Its  trea- 
sury notes,  193.  Its  preparation  for  war  in  times  of  peace,  229-9.  Its 
duties  to  other  nationalities,  36, 39,  228-9.  Its  passivity  as  regards  indus- 
try proposed,  18,  19,  223-31,  264-5,  289,  309,  355.  That  policy  contrary 
to  the  Constitution,  224-5,  264-5.  Its  methods  of  discrimination  in  favor 
of  home  industry,  231-5.  (See  Tariff,  Duties.)  Its  duty  to  the  national 
domain,  48.     Its  duties  to  education,  180,  229-30,  366-7,  373,  395. 

Grain  trade  of  Russia,  241, 329-30.  Of  Sweden,  113,  332.  Of  Greece  and  Rome, 
267,  268.     Of  the  West  with  Europe,  92-3,  200,  239-41,  241-2,  263. 

Greeley,  Horace,  30. 

Greenback  Party,  theory  of  the,  194. 

Greg,  W.  R.,  24,  53,  61,  04,  67.- 


406  INDEX. 

Gustavus  Adolphus,  331. 

Hamilton,  Alex.,  27,  29,  173,  251-2,  344,  345-6. 

Hardware,  American,  255. 
V^  Harmony  of  interests,  29-30.  Between  capital  and  l£.bor,  119-20,  121,  122, 
124,  129,  135-6.  Methods  to  realize  it,  135-9.  Of  agricultural  and 
manufacturing  classes,  220,  235-6,  241,  242-5,  263.  Of  producers 
and  consumers,  215-6,  220,  251-2,  257,  258,  296-7,  327.  In  true  com- 
merce, 197,  220. 

Health,  duty  of  the  state  to  promote,  50-3,  180.     And  education,  366. 
■/Hindrances  to  natural  growth  or  progress,  28,  30,  118,  127-33,  170,  187, 
221-3,  259,  260-1,  263-4. 

History,  its  use  in  education,  381-3. 

Home  industry,  16,  40,  211-2,  215,  216-7,  225-6,  235-9,  240-4. 

Homer,  121,  368,  391. 

Homestead  law,  240. 

Houses  of  the  working  class,  132,  260.     In  Philadelphia,  238. 

Hughes,  Thos.,  105,  137. 

Huguenots  driven  from  France,  17,  271.  In  Germany,  322.  In  England, 
277,  278-9. 

Humboldt,  A.,  207. 

Humboldt,  W.,  324. 

Hume,  David,  64,  149-50,  191. 

Hunter  life,  49,  68,  71. 

Hunter,  W.  W.,  60. 

Huskisson,  222,  283,  324. 

Imagination,  its  power,  263-4. 

Immigration  into  the  United  States,  237,  242,  291. 

Implements,  agricultural,  70-1,  100. 

Im])6t  progressif,  189. 

Improvements  in  production,  57,  69,  72,  237,  250,  254-5.  In  machinery, 
127-8,  238,  254-5,  280,  281,  336,  346,  388-9. 

Incidence  of  taxation,  181-3,  185.     Of  protective  duties,  332-5. 

Income  tax,  fairest  in  theory,  185.  Practical  objections,  187-9.  In  Eng- 
land, 185,  187,  189.     In  America,  188-9. 

Individuality  the  correlate  of  interdependence  and  close  association,  40, 
216-7,220-1. 

*  Industrial  partnerships"  preferable  to  co-operation,  138-9. 

Industrial  state,  as  conceived  by  Fichte  and  List,  27,  28-9,  367.  Its  nature, 
38.  Its  divisions,  40.  (See  Equilibriutn  of  the  Industries.)  Communists 
make  it  everything,  Free-traders  nothing,  224-5,  264-6.  National  edu- 
cation regards  it,  375,  384-94. 

Industry,  Quesnay's  view  of,  18.  Adam  Smith's,  19.  Fichte's,  27.  Dis- 
tinctive character  of  modern  industry,  72,  115,  127-8,  281,  345.  As  re- 
lated to  money,  150,  151-2,  154-5,  207-9.  Obstructed  by  wrong  taxation, 
182-3.     Its  natural  growth  in  variety,  19,  30,  90-1,  219-20,  259. 


INDEX.  407 

Inequality  of  condition,  Ricardo  accounts  for,  22,  93-5,  117,  265.  Carey  on, 
30,  117-8,  265.  Promoted  by  panics,  168,  173.  By  indirect  taxes,  182-3, 
189.     By  free  trade,  238,  260,  314,  339-40. 

Inflation  of  prices,  354. 

Ingram,  Prof.,  26. 

Inheritances,  taxes  on,  183. 

Instruments,  the  law  of  progress  as  regards,  124-6,  144,  198,  245-6.  Money 
the  instrument  of  association  and  exchange,  142,  144,  151,  154,  162. 

Intensive  agriculture,  72,  87,  89,  237. 

Interference.     (See  Hindrances.) 

Interest  on  money,  151,  159,  162,  163,  165-6,  169,  172. 

Interest,  what  is  a  man's,  231,  257-8. 

Internal  revenue,  183.     (See  Excises.) 

International  exchanges :  Smith  and  Say's  theory,  19,  20, 205-6,  207-9,  260- 1. 
Bicardo  and  McCulloch's  criticism  of  it,  206-7.  The  theory  of  Torrens, 
Ricardo,  and  Mills,  22-3,  209-10,  256-9.  Some  objections  to  it,  210-6,  256-9. 
No  test  of  national  prosperity,  217,  262,  274,  292,  301,  312,  332. 

Inventions,  238,  281,  385,  360. 

Iron:  use  in  coinage,  148.  Imported  into  mediaeval  England  from  Nor- 
mandy, 72,  276.  Yarranton  would  import  the  industry,  278.  Its  protec- 
tion, 1771-1834,  in  England,  280.  Prussian  and  Belgian  rivals  the  Eng- 
lish, 285-7,  319,  328.  Belgian  protection,  318.  French,  275.  German, 
326.  In  Ireland,  298,  301.  In  India,  259.  In  America,  210,  234,  255, 
342,  347,  350,  351,  356,  357-8. 

Jackson,  Andrew,  174,  243,  353. 

Jevons,  Stanley,  149. 

Jural  state,  its  nature,  38.  Its  development,  179-80.  Chief  theme  of  early 
political  philosophers,  267.     National  education  regards,  375,  380-4. 

Justice  or  righteousness  of  the  essence  of  the  state,  34,  36-7,  225,  380-3.  Is 
twofold,  37,  225.  Is  not  all  of  morality,  383.  Justice  of  war,  228-9,  259. 
"Justices' justice,"  179. 

Karl  the  Great,  369. 

Kathedersocialisten,  school  of  the,  25,  26. 

Kingsley,  Chas.,  132,  288. 

Knox,  John,  371. 

Kraus,  C.  J.,  88,  323. 

Labor,  the  source  of  wealth,  16,  18,  19,  41,  114.  Its  development  in  method, 
49-50,  68-9,  70-2,  100,  115,  121-4,  127-8,  197,  219-20;  237-8.  Its  growth 
in  power  over  capital,  74,  97,  124-6,  237-8,  265.  It  is  most  abundantly 
employed  and  best  paid  in  the  neighborhood  of  varied  industry,  129-30, 
211-2,  235-9,  294-5,  301,  303,  305,  306,  311-2,  327,  337.  "More  labor  is 
less  efiicient  in  agriculture,"  81,  88,  93,  94,  95.  (See  Go-operation,  Indus- 
try,  Wages.) 

Laissez /aire,  270,  364.     As  a  theory,  286,  289,  355. 

Land,  the  alleged  monopoly  of  it,  22,  93,  96-6,     Derives  its  value  from  labor 


408  INDEX. 

expended,  114,  125.  The  worst  is  settled  first,  99-100.  (See  Settlement.) 
Much  lies  idle  in  England,  59,  82.  Very  little  is  farmed  scientifically, 
58-9,  82.  It  supports  a  relatively  scanty  population,  78,  212,  213,  259. 
Is  owned  by  a  small  and  diminishing  number  of  persons,  77-8,  82-3.  In 
progressive  countries  it  is  owned  by  a  large  and  increasing  number,  72-3, 
86-90,  122.  Duties  of  the  state  toward  it,  48,  70,  88,  95-6,  304-7.  (See 
Agriculture,  Farmers,  Bent,  Soil.) 

Land-banks  in  Europe,  163,  171-2.     In  the  colonies,  172,  173. 

Land-acts  of  1870  and  1881,  85.. 

Landlords  in  Ireland,  84. 

Land-tax,  raises  rents,  184.  Better  than  taxes  on  personal  property,  185. 
English,  186.    American,  185,  188.     East  Indian,  313-4. 

Land  tenure,  primitive,  was  communistic,  24,  73-4,  75,  90,  98-9.  Feudal, 
74-5,  86-7,  88.  In  Scotland,  85.  The  Highlands  converted  into  private 
estates,  85.  Abolished  in  England  at  the  Eestoration,  77,  79,  186.  In 
Prussia  by  Stein,  88-9,  122.  The  modern  English  and  its  failures,  75-83, 
212,  213.     Does  not  account  for  the  poverty  of  Ireland,  304-5. 

Language,  and  nationality,  34,  376.  Two  in  Belgium,  317,  365.  Language 
in  education,  376-7.     Of  the  English  Bible,  384. 

Large  estates  in  Saxony,  72.  "  Ruined  Italy/*  73.  Their  growth  in  Eng- 
land and  Scotland,  77-83. 

Lassalle,  30,  117-8,  266. 

Laveleye,  E.  de,  24,  26,  72. 

Lavcrgne,  M.  dc,  87. 

Law,  John,  170,  271. 

Legal  tender,  146-8. 

Legislation,  its  formal  beginnings,  83.  Its  true  progress,  35,  38.  Industrial, 
presents  nice  problems,  225.  Its  true  province,  30,  224-6,  258-9,  264-5. 
As  to  health  and  population,  52-3,  60-1,  180,  249.  As  to  pauperism,  54, 
130-1.  As  to  land,  73,  75,  77,  79,  86-7,  88-9,  90,  96,  99,  305-7.  As  to 
slavery,  89-90,  122.  As  to  labor,  122-3,  130-1,  133,  136.  As  to  temper- 
ance, 132.  As  to  coined  money,  146-8.  As  to  banking,  155-6,  157-8, 
162-3,  165-7,  169-78.  As  to  revenue  and  taxation,  180,  181,  190,  229-30, 
313-7.  As  to  national  debts,  190-3.  As  to  promoting  home  industry, 
210,  213,  223-8,  231-5,  239-40,  247-52,  255-6,  259-61,  264-7.  As  to  hin- 
dering it,  221-2,  270-1,  273-5,  289-94,  297-302,  309-12,  323-4,  329-30, 
332-7,  341-3,  353^,  355-7.  As  to  education,  180,  248-9,  366-9,  371-3, 
384-5,  387,  390,  392,  395. 

Leslie,  CliflTe,  28,  78,  81,  117,  129,  130,  236,  319-20. 

Levees,  112. 

Liconjics,  1.32,  181. 

Linen  manufacture  in  Ireland,  130,  298-300.  In  England,  278,  279.  In 
Belgium,  275,  319.     In  Germany,  328. 

List,  Frederick,  28,  323,  326,  320,  328. 

Lu«al  centres,  311,  314. 


INDEX.  409 

Lock-outs,  134,  ]  98. 

London,  67, 151,  277,  389. 

London  Quarterly  Review  OD  Turkey,  337-41. 

London  Review,  286. 

Lotteries,  180. 

Ludlow,  J.  M.,  137,  310-1,  314,  315. 

Luther,  372. 

Macaulay,  T.  B.,  13,  67,  77. 

Macgregor,  335. 

Machinery,  its  introduction  affects  labor,  50,  57,  127-9,  345,  365-6.  Has 
destroyed  some  local  industries,  312,  317,  320,  336-7,  390.  England  pro- 
hibited its  export,  281,  312,  317,  330,  337.  Its  accumulation  in  England, 
281.     Invented  or  improved  in  America,  238,  281,  346. 

Madison,  James,  174,  350. 

Magistrates,  professional  the  best,  179. 

Maine,  Sir  H.  S.,  24,  99. 

Malthus,  Rev.  T.  R.,  21,  22,  24,  25,  53-69,  93,  94,  97,  118. 

Man,  not  to  be  treated  as  a  thing,  11-12,  119-20,  121-2.  His  relation  to 
Nature,  29,  41-2,  368. 

Manchester,  238-9,  280,  300. 

Manor,  its  constitution,  74,  98-9,  179.     Its  copy  or  roll  (rotulus),  74,  77,  276. 

Manufactures,  Quesnay's  theory  of,  18.  Adam  Smith's,  19.  Their  natural 
growth,  219-23,  258-9.  Benefit  of  their  neighborhood,  90-2,  128,  129-30, 
237-9,  240-7,  262-3.  Their  destruction  in  Ireland  in  the  reign  of  William 
III.,  84.  Effects  of  their  absence,  40,  57,  90-3,  214-6,  222-3,  227-8,  235, 
292,  305-6,  311-2,  330,  334-5,  336-41.  Concentration  in  England,  212-4, 
280-1.  Their  history  in  Asia,  Europe,  and  America,  267-364.  In  rela- 
tion to  education,  387-95.  (See  Equilibrium  of  the  Industries,  Machinery, 
Protection.) 

Manure,  needed,  but  wasted,  46,  71,  72,  92,  243,  244,  273,  317. 

Mark,  the  Teutonic,  33-4,  73-4,  197.     (See  Manor.) 

Markets,  their  primitive  character,  197.  "Buying  in  the  cheapest,"  210,  211, 
215-6,  257-8,  292.  Fostering  a  home  market,  46-7,  224,  226,  241,  242,  243, 
244,  245-6,  255,  261,  301,  332.  The  competitions  of  the  home  market, 
226-7,  251-2.     The  trader's  power  over.     (See  Forestalling,  Prices.) 

Mathematics  in  education,  378. 

Maurice,  F.  D.,  28,  39,  137,  221,  372,  382. 

McCulloch,  J.  C,  23,  55,  57,  61,  166,  185,  191,  206,  207,  252,  335,  336-7. 

«  Mercantile  School,"  16-7,  209. 

Metals,  precious:  their  history,  142-52.  Their  use  as  money,  143.  Our 
supply,  357.     (See  Gold,  Silver,  Money.) 

Metayer  system  of  land  tenure,  90. 

Method  of  economic  study,  25,  31,  57. 

Middle  class  in  England,  2S2-4,  287,  288.     None  in  the  S>uth,  358. 

Military  supplies,  depend  on  manufactures,  227-8,  297,  345,  357-8. 


410  INDEX. 

Mill,  James,  22,  54. 

Mill,  John  Stuart,  24,  25,  31,  51,  54,  55,  56-7,  95,  118,  121,  127,  IhO,  201-2, 
209-10,  249,  250-1,  266,  301,  303. 

Milton,  John,  377,  378,  384. 

Mind,  its  growth  limits  that  of  numbers,  65-6.  Mind  and  muscle,  127-8, 237. 
(See  Culture  State,  Education.) 

Mirabeau,  18,  322. 

Mohammedan  regard  for  trees,  48.  Oppressive  as  rulers,  61,  67-8.  Their 
bad  finance,  189,  313,  316-7,  337-8. 

Money,  its  origin,  nature  and  advantages,  142-4.  Coined  money,  143, 144-5, 
148-9.  (See  Gold,  Silver,  Coinage,  Metals  Precious.)  Paper  money,  149, 
152-6.  (See  Bill  of  Exchange,  Bank  Notes.)  Money  of  account,  153, 
1^156-62.  (See  Banking.)  The  instrument  of  exchange  and  of  associa- 
tion, 143.  The  relation  of  its  quantity  to  its  purchasing  power,  149-52. 
Its  supply  at  different  periods,  16, 148-9,  207.  Its  plenty  stimulates  pro- 
duction, and  vice  versa,  151-2,  154-5,  208-9.  Unequal  commerce  drains  a 
country  of  its  money,  151-2,  206-7,  209,  329-30,  334,  336,  338,  339,  356. 
Prohibitions  on  its  export,  16, 17,  321.  Unprogressive  countries  sometimes 
absorb  it,  151,  166,  206.  English  theories  about,  22-3,  23-4, 149, 156, 165, 
206-9. 

Monopolies  as  a  source  of  revenue,  17-8,  180-1,  183,  271,  313-7,  322.  "Mo- 
nopoly of  land,"  22,  23,  93,  95-6,  114.  In  trade,  223,  267-8.  In  banking, 
163,  169,  171,  174-5,  176-7.  Protection  does  not  create  monopoly,  251-2. 
Its  aim  and  tendency  to  destroy  actual  monopolies,  225-7,  295. 

Monroe,  President,  351. 

Morality  of  a  nation,  34-7,  39,  361-2,  380-3.  Christian  or  individual  moral- 
ity, 383-4.  Its  relation  to  celibacy,  56,  61,  65,  110.  And  to  wages,  120, 
121.    And  to  education,  374-5. 

More,  Sir  Thomas,  75-6. 

Morris,  Robert,  172-3. 

Mountain  districts  often  settled  before  the  plains,  Chap.  VI.,  passim. 

Murdock,  John,  86. 

Murphy,  J.  N.,  301-2,  307-9. 

Music,  a  science  and  an  art,  15,  23.     In  education,  377-8. 

Napoleon,  136,  158,  255,  271-3,  281-2,  318,  329,  346,  367,  387-8. 

Napoleon  III.,  273-4. 

Nasse,  24,  75,  98-9. 

Nation  (New  York)  quoted,  91,  178,  264. 

Nation  :  historical  origin,  33-4.  The  modem  form  of  the  state,  33.  Its  true 
nature,  14,  34.  A  moral  personality,  35-7,  380.  Its  vocation,  36,  225. 
(See  Jural  State.)  Its  progress,  37-8,  40.  Its  industrial  existence,  38,  40. 
(Sec  Industrial  State.)  Its  self-preservation  not  selfishness,  39.  Its  right 
of  "eminent  domain"  over  its  soil,  48,  70,  95-6.  (See  Land,  Soil.)  The 
territory  of  each  is  capable  of  feeding  its  people,  113,  217.  Its  unity  is 
Btrengtliened  by  variety  of  industry  and  individual  freedom,  and  vice  versd, 


INDEX.  411 

40,  216-7,  220-1,  223,  328-9,  341.  Is  wise  to  make  sacrifices,  248-9,  226, 
292.  Its  war  powers  and  duties,  preparations,  227-8,  347,  357-8.  Its 
peculiar  financial  policy,  229-30.  Is  ignored  by  the  cosmopolitical  school, 
19-20,  230-1. 

National  banks,  176-7. 

National  debts,  190-3,  229,  344-5,  353. 

National  economy,  11,  14. 

National  education,  its  policy,  365-7,  373-5.  Its  history,  367-73.  Its  proper 
shape  and  drift,  375-95.  Its  opponents,  248-9,371,  373,  395.  (See  Edu- 
cation.) 

Nationalist  economists;  the  "mercantile  school,"  16-7.  Bishop  Berkeley, 
26.  Fichte,  27.  Coleridge  and  Maurice,  27-8.  List,  28-9.  II.  C.  Carey 
and  his  school,  29-31.     Horace  Bushnell,  231. 

Nationalist  policy.     (See  Protection.) 

Natural  advantages  of  each  country,  210,  258-9,  293. 

Nature.     (See  Man,   Wealth,   Value.) 

Navigation  laws,  English,  277-8,  300,  324,  341. 

Necker,  171,  191. 

Neighborhood  of  farm  and  factory  benefits  agriculture,  46-7,  90-3,  214-6, 
239-45,  263,  276,  303.  Of  difTerent  industries  raises  wages,  129-30,  211-2, 
235-9.  Of  producer  and  consumer  diminishes  the  trader's  profits  and  his 
power,  198-201.     Neighborhood  knowledge,  379-80,  386,  394. 

Nesselrode,  Count,  330. 

New  York,  173, 238. 

Nickel  in  coinage,  148. 

North  British  Eeview,  284-5. 

Opium  in  India  and  China,  206,  310-1,  315-6. 

Over-issues.     (See  Bank  Notes.) 

Over-production,  214-5,  261. 

Owen,  Robert,  136,  202. 

Panics,  their  nature,  161-2.  In  England,  163-4,  165,  166-8,  282,  349.  In 
Scotland,  170.  In  France,  170,  171,  274.  In  America,  173,  174,  205,  354, 
357,  361. 

Paper-money,  152-6,  193-4. 

Parsimony,  not  always  economy,  14, 119-20,  211,  235.  The  law  of  parsimony 
applies  to  instruments,  119,  144,  198,  245. 

Passivity,  governmental,  in  regard  to  industry,  18,  19,  21,  22,  30,  210,  212, 
223-6,  264-6,  291,  321.     In  regard  to  popular  misery,  54,  95,  289. 

Passivity  of  money,  22-3,  23-4,  149-52. 

Paterson,  W.,  162,  168. 

Patriotism  in  relation  to  national  economy,  20,  39,  80,  83, 191,  212,  227-8, 
288-9,  328-9,  341.     Its  truest  type,  39,  382. 

Patterson,  R.  H.,  146,  149,  150,  156. 

Paul,  38,  221,  257. 

Pauperism,  the  Malthusiau  view  of,  22-3,  54,  116-7,  205.     The  true  view,  30, 


412  INDEX. 

114.    In  England,  83,  130-1,  212.    In  Ireland,  303,  304,  308.    In  BeL 
gium,  88,  236,  320.     In  America,  238-9. 

Pearson,  C.  H.,  101-7. 

Peasantry,  78,  80,  82,  82-3,  89. 

Peel,  Sir  Robert,  165-8,  183>  187. 

People's  banks  in  Germany,  120,  366. 

Personal  property  taxed,  184-5. 

Philadelphia,  111,  172-3,  238-9. 

Phosphorus  in  the  human  frame,  67. 

Physical  science  in  education,  378. 

Pilgrimages,  sources  of  pestilence,  67. 

Pitt  (the  elder),  185,  186,  189. 

Plants,  their  geological  history,  42-3.     Their  food,  42,  43-7. 

Platinum  in  Russian  coins,  148. 

Plato,  14,  36,  378,  381. 

Pliny  the  elder,  73,  121. 

Plutarch,  381. 

Poorer  classes,  the  statesman's  problem,  115.  Affected  by  indirect  taxes, 
182-3,  189.  Buy  the  dearest,  202.  Poorer  nation  injured  by  unrestricted 
trade  with  a  richer,  222-3.     (See  Free  Trade.) 

Population  :  its  growth  the  first  condition  of  advance  in  wealth,  49-51,  70-2, 
100,  113-4,  198,  219.  Duty  of  the  state  to  foster  that  growth,  50-4,  366, 
380.  Malthusian  theory,  21-2,  53-7,  94,  95, 110.  Its  English  critics,  24, 
63.  Discredited  by  facts,  57-63.  Is  the  parent  of  Ricardo's  theory  of 
rent,  93.  And  of  the  wage-fund  theory,  116-7.  Population  is  self-reg- 
ulative, 63-9.  That  of  England,  58,  61,  62,  64,  101-2.  Of  Ireland,  58, 
69-60,  62-3,  109,  130,  302-3.  Of  Belgium,  57,  58.  Of  France,  61,  62,  64, 
123.     Of  America,  62,  64-5. 

Post-office,  180,  184,  248. 

Poverty.     (See  PanpeHsm.) 

Power  over  nature,  29,  41,  49,  66,  69.  Power  to  consume,  the  test  of  pros- 
perity, 217,  327. 

Premiums,  16,  231. 

Prices  determined  by  cost  of  reproduction,  125.  Their  relation  to  the  supply 
of  money,  22-3,  23-4,  150-3,  207-9.  When  can  the  trader  fix  prices,  200-2, 
245,  294,  296-7,  356.  Raised  temporarily,  but  ultimately  reduced  by  pro- 
tective duties,  233-4,  248,  251-6,  280,  327,  345,  346,  355.  Of  labor.  (See 
Wage».) 

Primogeniture,  right  of,  79. 

Prison  labor,  131.     Its  effect  on  the  working  classes,  131. 

Production,  Quesnay's  theory,  18.  Adam  Smith's,  19.  Its  development, 
68-9.  Promoted  by  the  plenty  of  money,  151-2,  207-9.  And  by  ma- 
chinery, 127-8,  281. 

Profits:  their  incriualitios,  19.     Diminished  by  waste,  120,  138.     Profits  of 


INDEX.  413 

farming,  72,  91,  214-6,  241,  242-7.  Of  banking,  155,  175.  Of  the  trader, 
198-203,  245-6.     Of  manufacturing,  247,  252. 

Progress  is  normal,  19,  29-30,  34-5,  57,  69,  113-4,  125-6,  265-6.  Its  inilus- 
trial  goal,  27,  29,  40,  115,  220,  259.  Its  method.  (See  Differentiation  of 
Fu)tction.) 

Prohibition  of  imports,  231,  248,  272,  276,  279,  280,  283,  284,  310,  322,  323, 
324,  332,  333.  Of  exports,  16,  276,  281,  298-9,  312,  317,  322,  324,  330,  337. 
Of  free  contract,  96,  305-7. 

Proletariat,  61,  73,  115. 

Prolongation  of  life,  67. 

Prophets,  the  Hebrew,  381-2.     Isaiah,  73. 

Protection  is  natural  resistance  to  an  unnatural  status,  212-4,  226-7,  259. 
Its  method,  231-5.  It  benefits  labor,  231-9,  129-30,  211.  It  benefits  ag- 
riculture, 90-3,  214-6,  239-45.  It  makes  commerce  equitable,  245-8.  Is 
not  irreligious  and  selfish,  364.  Its  efi'ect  on  manufactures,  248-56.  Seven 
common  objections  to  it  answered,  256-66.  It  has  the  sanction  of  the 
greatest  free  traders,  249-51.  It  is  a  measure  of  national  defence,  227-9, 
345,  347.  It  is  the  policy  of  progressive  nations,  especially  in  their  youth, 
226-7,  273,  275,  294-5,  317,  328.  Is  a  great  promoter  of  commerce,  362. 
It  does  not  create  monopolies,  251-2.  It  has  the  sanction  of  the  U.  S. 
Constitution,  224-5,  265,  344.  Its  history  in  Europe,  267-80,  300-1,  317- 
333,  336.     In  America,  344-364.     In  Australia,  294-7. 

Prudhommes,  Conseila  de,  136. 

Publicans,  190. 

Purchasing  power  of  money,  22-3,  23-4,  148-52,  217.  Of  wages,  63,  123, 
125,  237. 

Rack-rents  in  Ireland,  84,  99,  304,  305.     In  England,  76,  78. 

Railroads,  subsidies,  240.     Growth  in  India,  259. 

Rainfall,  aflfected  by  trees,  47-8,  104-5. 

Rapidity  of  social  circulation,  68,  144,  152,  156,  160,  199.  How  promoted, 
150-1,  154,  198,  204-5,  205-6,  260-1,  309.  How  checked,  182-3,  223,  292-3, 
301,  307-8,  311-2,  337-8. 

Rate  of  increase  of  population,  53,  61-3,  66-7,  94,  303. 

Rate  of  wages,  116,  117,  119,  123-4,  129-30,  133-4,  140. 

Raw  materials :  their  export  unprofitable,  91,  214-6,  241,  314.  Their  pro- 
duction protected,  239-40,  256,  346.  Progressive  countries  cease  their  ex- 
port, 246,  328.     The  relation  of  their  price  to  that  of  manufactures,  241. 

Raw  material  associations  {lioh-stoff-vereine),  139-40. 

Reciprocity  between  England  and  other  countries,  312,  324,  330-1.  Between 
Belgium  and  Holland,  318.     Between  Austria  and  Germany,  325. 

Reformation,  76-7,  288-9. 

Rent,  its  supposed  origin,  22-3,  93-5.  Its  relation  to.  the  whole  product, 
96-8.  In  primitive  society  is  customary,  not  competitive,  24,  74-5,  98-9. 
In  England,  74-5,  76-7,  78.     In  Ireland,  304-7. 

Reproduction :  its  cost  determines  prices,  125-6. 


414  INDEX. 

"  Reproductive  consumption,"  256. 

Responsibility  of  the  capitalist  for  rate  of  wages,  120-1.  Of  governments  for 
the  public  welfare,  37,  224-5,  264-5.     (See  Education,  Government.) 

Resumption.     (See  Specie  Payments.) 

Revenue:  growing  need  of,  179-80.  Earlier  methods  of  getting,  180-1,  186, 
276.  Modern  methods.  (See  Excises,  Customs,  Income  Tax,  Taxation, 
Land  Tax,  Tariff.)  Should  cover  current  expenses,  190-1.  Revenue 
tariffs  objectionable,  232,  290-1,  347,  350-1,  354,  355-7.  Protective  tariffs 
yield  a  large  revenue,  233,  333,  353,  355.  How  raised  in  England,  186, 
187,  291.  In  Germany,  325-7.  In  India,  313-7.  In  Turkey,  337,  339. 
In  Russia,  90. 

Revolutions  are  abnormal,  34-5,  230.  English,  123, 162,  186,  298.  French 
of  1789,  86-7,  171,  271.     American,  172,  193,  281,  343. 

Ricardo,  22,  23,  24,  25,  93,  114,  118,  191,  206,  207,  209,  273. 

Rights,  natural  in  their  relation  to  the  state,  34,  36,  223-4.  The  supposed  right 
of  free  trade,  223.  The  imperfectly  defined  rights  of  the  feudal  land  ten- 
ure, 74-5,  79,  88-9,  306. 

Risks,  the  farmer's,  91,  211-2,  214,  244-5.  The  trader's,  203-4.  The  manu- 
facturer's, 215. 

Rivers,  47,  48,  100,  105,  112,  113. 

Rogers,  Thorold,  71-2,  74,  123,  212-3,  223,  251,  252,  395. 

Roscher,  Prof.,  26. 

Rossi,  21,  249-50. 

Rotation  of  crops,  46,  72,  74,  92,  243-5,  385. 

Rouleaux,  Prof.,  359. 

Sacrifices,  national,  their  wisdom,  201,  226,  248-9,  253,  286,  292,  295,  318, 
366. 

Sailors,  216,  236,  246,  259. 

Saint  Simon,  118. 

Salt,  240,  315,  347. 

Saturday  Review,  31,  364. 

Savage  state,  29,  30,  38,  49,  157. 

Say,  J.  B.,  20,  21,  205,  207,  249,  272. 

Schultze-Delitzsch,  30,  31,  117-8,  139-40,  203,  266. 

Science,  its  nature  and  stages  of  development,  11-12,  14-15. 

Scott,  Sir  Walter,  122,  154-5,  170,  384. 

Selfishness  not  chargeable  on  patriotism,  39.     It  is  short-sighted,  48,  51-2. 

Senior,  N.  W.,  23,  24,  53,  56,  78-9,  97,  288. 

Serfdom,  mediasval,  74,  122.  Abolished  in  Prussia  by  Stein,  88-9,  122.  In 
Russia,  89-90,  331. 

Settlement  of  the  soil :  its  true  law,  99-101.  Exemplifications  of  the  law. 
Chapter  VI. 

Several.     (See  Community.) 

Sheffield,  52,  233-4. 

Shepherd  life,  49,  68,  71. 


x/Si 


INDEX.  415 

Shipping,  English,  277-8,  324.     Prussian,  324.     Spanish,  333.     American, 

347,  319,  303,  364. 
Silica  in  the  soil,  45. 
Silk  production  and  manufacture  in  France,  269,  270.     In  China,  206.     In 

England,  246,  279,  284,  285,  289.     In  Ireland,  300.     In  Germany,  328. 

In  Russia,  330-1.     In  America,  354. 
Silver  in  coinage,  142-52.    Demonetization  of,  146-8.    Absorbed  by  the  East, 

148,  166,  206,  313. 
Sinking  fund,  192. 

Slavery,  European,  104,  121-2.     American,  352,  355,  357. 
Small  farms,  72,  90. 
Smiles,  Samuel,  271,  275,  277,  279. 
Smith,  Adam,  18,  19,  20,  26,  29,  80,  99,  124, 165,  191,  205,  206,  249,  260,  266, 

269,  270,  323,  324,  329-30. 
Smith,  E.  Peshine,  30. 
Smith,  Gerrit,  248,  373. 
Smith,  Sidney,  186-7. 

Smuggling,  184,  232.     In  Germany,  323.     Through  Portugal  into  Spain,  335. 
Socialism,  25,  30,  96,  117-9,  136,  199. 
Social  science,  definition,  11-15.     Younger  than  national  economy,  14-15, 

267.     Its  history,  15-31. 
Society  co-extensive  with  the  human  race,  13.     Human  welfare  depends  on, 

13-14.    Its  general  development,  32-4,  36,  38.    Its  industrial  development, 

29-30,  38-40,  49-50,  68-9,  70-2,  99-100,  142,  144,  197-8,  216-21. 
Soil :  man's  dependence  on  it,  41-2.    Its  history  and  composition,  42-5.     Its 

exhaustion,  46-8,  92,  243-4,  304.     Rarely  well  cultivated,  58-9,  385.     (See 

Ag7'iculture,  Farming,  Land,  Settlement.) 
Solomon,  73,  119,  202. 
Specie  payments,  suspended  in  England,  163,  164.     Resumption  in  England 

in  1821,  164.     Resumption  of,  in  the  United  States,  194.     Suspension  in 

1837,  354. 
Specific  duties  the  best,  231-2,  233.     Preferred  in  England,  284.     In  Ger- 
many, 326-7.     In  Portugal,  336.     (See  Ad  valorem.) 
Jpectator  (London),  132,  255,  287,  306,  307,  313. 
Speculation  and  the  credit  system,  204.     In  England,  164,  165,  282,  34?   4, 

349-50.     In  America,  173,  174,  353-4,  357.     In  France,  170. 
Spencer,  Herbert,  24,  37-8,  53,  66,  69,  219,  248,  371. 
Stamp  duties,  183. 
Standard  of  value,  148-9. 
State,  the  tribe  and  the  city  its  ancient  forms,  and  the  nation  its  modern, 

32-3.     Exists  jure  diviuo,  35-6.     Its  duty  to  industry,  30.     (See  Govern- 
ment, Nation.) 
Steam,   adapted   to   small    establishments,  128-9.     "Watt's    invention,   128, 

281.    John  Fitch's,  216,  281.     Steam-power  comparable  to  pap^r-money 

152. 


416  INDEX. 

Steel,  English,  233-4.     American,  256. 

Stein,  88,  122. 

Steuerverein,  325. 

Stowe,  Harriet  Beecher,  86. 

Strikes,  133-4.     In  Philadelphia,  238. 

Subsidies,  240,  364. 

Sugar,  284.     (See  Beet  Sugar.) 

Sully,  269. 

Suspension.     (See  Specie  Payments.) 

Swift,  Dean,  183,  299,  302. 

Syme,  David,  200,  226-7,  295,  296,  297. 

Talleyrand,  294. 

Tariffs  and  their  methods,  231-5.  (See  Ad  valorem  Duties^  Incidence,  Specific 
Duties.)  Tinkering  the  tariff,  190,  234,  247.  *'  A  tariff  and  internal  im- 
provements," 240.  Not  "  sectional "  in  their  purpose,  but  national,  263-4, 
Revenue  tariffs,  232,  290-1.  French,  of  1664,  269-70.  Of  1786,  271.  Of 
1815-60,  272-3,  282.  Of  1861,  273-5.  English,  of  the  seventeenth  century, 
278,  279.  Of  the  eighteenth  century,  280.  Of  1819,  280,  283.  Of  1832, 
1845-6,  1851,  and  1853,  283-4.  Of  1861,  284,  285.  Canadian,  290-1,  313. 
Australian,  294-7.  Irish  of  1699,  299.  Of  1783-1801,  300-1.  Of  1808,  301. 
East  Indian  of  1813,  310,  312.  Of  1857,  1859,  and  later,  255,  313.  Belgian, 
of  1844,  318.  German  of  last  century,  322.  Of  1813,  323.  Of  1818,  324-6. 
Of  1843-5,  326.  Of  1864  and  1879,  329.  Of  the  Steuerverein,  325.  Russian 
of  1820  and  1822,  330.  Of  1830  and  1869,  330-1.  Sioedish  of  1824,  332. 
Spanish  of  1722,  332.  Of  1778,  333.  Of  1845  and  1869,  333.  Porttignese  of 
1684,  .334.  Of  1703,  334-5.  Of  1837  and  1841,  336.  Turkish,  SZ7.  Amer- 
ican of  1789  and  1790,  346,  358.  Of  1812,  347,  350.  Of  1816,  350-1.  Of 
1824,347,351-2.  Of  1828,  352-3.  Of  1832,  353.  Of  1833-42,  353.  Of  1842, 
355.  Of  1846,  355-6.  Of  1857,  357.  Of  1861-9,  275,  357.  Of  1867,  256. 
Of  1869,  261.  Effect  of  the  present  protective  tariff  in  the  United  States, 
358,  360. 

Taxation  the  modern  source  of  revenue,  180,  181.  Points  in  its  economy, 
189-90.  Its  incidence,  182.  Direct  and  indirect  sorts,  181.  Indirect 
taxes  objectionable,  181-3,  186-7.  Yields  most  when  lightest,  183-4. 
Direct  taxes,  184.  Capitation  tax,  184-5.  Taxes  on  real  and  personal 
property,  185-8.  Taxes  on  income,  185,  186,  187-8.  English  taxation, 
185-7,  189,  229-30,  291.  Canadian,  291.  East  Indian,  313-7.  Russian, 
90.  Spanish,  183,  268,  332.  Turkish,  337-9.  American,  183-5,  188-9, 
195,  196,  229-30,  240. 

Tenant-right,  84. 

Tennyson,  Alfred,  213,  217,  228,  254. 

Textile  fabrics,  once  imported  by  England,  275,  276,  309.  Their  manufacture 
begun  and  protected,  277,  279-80.  Their  manufacture  in  France,  270, 
285.     In  India,  309-10,  312,  313.     In  Belgium,  317,  319.     In  Germany, 


INDEX.  417 

326,  328.     In  Russia,  330-1.     In  Denmark,  211,  332.     In  Portugal,  334, 
336.     In  Turkey,  336-7.     In  America,  342,  347,  350,  357-8. 

Thiers,  Adolph,  264. 

Thornton,  W.  T.,  24,  117,  125,  133-4,  304. 

Thorp,  73,  74. 

Tooke,  Thomas,  23,  24,  156,  207. 

Torrens,  Col.,  166,  209. 

Trade.     (See  Commerce,  International  Exchange.) 

Trader,  his  function  and  services,  197-8,  205,  245.  His  power,  198-9,  201-3, 
245-6.     His  speculations,  199-200. 

Trade  spirit  described  by  Coleridge,  27,  79-81.  Its  relation  to  war,  229-30. 
And  to  education,  372. 

Trades'  unions :  their  origin,  133,  134-5.  Their  success,  117,  133-4.  Out- 
lawed, 130,  133.     An  exotic  in  America,  135. 

Transportation,  an  unproductive  and  laborious  employment,  216,  217,  246, 
259,  274.  Its  cost  an  unequal  tax,  214,  215,  241,  245-6,  341.  How  to 
avoid  paying  it,  245-6,  259,  263. 

Treasury  notes,  194. 

Treaties  of  commerce :  English  with  France,  270,  271,  273-5,  284.  Belgian 
with  Holland,  318-9.  Austrian  with  Germany,  325.  German  with  Eng- 
land, 324.  Portuguese  with  England,  334-5.  Turkish  with  France  and 
England,  337.     American  with  England,  346.     With  Canada,  293-4. 

Trees  affect  rainfalls,  47-8, 101-2, 105.  Their  sustenance,  44-5.  One  obstacle 
to  the  settlement  of  the  best  soils,  100,  101-2,  104-5,  105-6,  113. 

Tribe,  grew  out  of  the  family  and  into  the  city  or  nation,  32-3,  381.  Its  com- 
munistic land  tenure,  73-4,  98-9.  Its  jural  and  industrial  methods,  68, 179, 
219.     Its  poverty,  59-60,  68,  71,  102,  107,  109,  219. 

Turgot,  18,  171,  208,  271. 

Twiss,  Dr.  Travers,  on  Colbert,  269,  270. 

Tyndall,  on  industrial  education,  390. 

Ulster,  Scotch  settlers  in,  83. 

Uniformity  of  occupation  marks  a  low  industrial  status,  37-8,  40,  216-7,  223, 
261,  294,  295,  301,  305,  306,  335,  338.  Is  associated  with  famine,  59,  60, 
302-3,  312. 

University,  368,  369-70,  372. 

Usurers,  338,  339,  340. 

Utility  not  value,  41,  113-4. 

Value,  its  nature,  41,  126.  Values  diminish  with  growth  of  society,  125-6. 
Of  land,  114,  125.  Of  gold  and  silver,  145-9.  The  trader  adds  to  value 
rather  than  to  wealth,  198-9,  245. 

Varied  industry.  (See  Farmer,  Labor,  Differentiation  of  Function,  Protec- 
tion.) 

Vegetable  kingdom  feeds  man,  42.     Its  development,  42-3.     Its  sustenance, 
43-5.     Vegetables  in  England,  72,  101,  277.     When  profitable  as  a  farm 
crop,  92,  243-5. 
27 


418  INDEX. 

Venice,  157-8, 161,  228,  275. 

Villeinage  in  mediaeval  Europe,  74,  89,  99, 122. 

Von  Maiirer,  24,  95-6. 

Wage-fund  theory,  22,  24,  116,  133-4. 

Wages  are  labor's  share  of  the  joint  product  of  labor  and  capital,  115-6, 137. 
English  theory  of  a  natural  and  necessary  rate,  21-2,  24,  54,  116-8,  119, 
133-4,  265.  And  of  their  equality,  19,  118-9.  They  are  highest  in  the 
neighborhood  of  varied  industry,  129-30,  235-9,  260.  Trades'  unions 
have  raised  them,  133-4.  Attempts  to  abolish  the  wages  system,  25,  118, 
136-8,  264,  265.  Or  to  modify  it,  138-9.  The  wages  of  women,  140.  His- 
tory  of  wages  in  England,  74,  83,  122-3,  124,  128,  129-30,  130-1,  133-5, 
136, 137, 138,  211-2,  236,  288.  In  Ireland,  63, 130,  236,  302-3.  In  France, 
97-8;  123.     In  America,  124,  128,  138,  235,  236-7,  238-9. 

Walker,  Prof.  P.  A.,  26. 

Walker,  Hon.  Robert  J.,  355. 

War  a  "check"  on  population,  54,  60,  62.  War  and  debts,  190-3.  Varied 
industry  a  preparation  for  it,  227-9,  347,  357-8.  War  is  not  the  worst  of 
national  calamities,  192,  226,  228-9. 

Warfare,  industrial,  its  methods,  201,  212, 222, 252-3.  Instances,  253, 296-7, 
301,  347-50,  351. 

Washington,  George,  344-5. 

Waste  lands  in  England,  59,  82. 

Water :  its  value,  41,  69.  Its  utility,  41,  42,  53.  Its  circulation  in  nature^ 
47-8,  100,  102. 

Watt,  James,  281,  388 

Wayland,  Dr.  Francis,  25,  255. 

Wealth  defined,  41,  49.  Its  diseuBsion  by  the  economists,  18,  19,  20,  23,  27, 
28,  29,  30.  The  tendency  to  attain  wealth  is  natural  and  normal,  29-30, 
57,  265-6.     The  conditions  of  its  growth.     (See  Labor.) 

Webster,  Daniel,  351,  352. 

Wells,  Hon.  David  A.,  25,  252. 

"  Wet  prairies,"  112. 

Whale  fishery  carried  on  by  co-operation,  138. 

Whately,  Archbishop,  55. 

Wheat,  its  yield  in  England,  68-9,  71,  75,  82.  Its  excQSsive  cultivation  in 
the  West,  92-3.     (See  Food,  Grain  Trade.) 

Whitney's  cotton  gin,  254,  281,  346. 

Wilson,  James,  313. 

Woman,  in  primitive  stage  of  society,  197.  Hours  of  work  in  factories,  51. 
Woman's  wages,  124,  337.     Woman's  work,  140-1. 

Wool  production  in  England,  275.  In  Ireland,  298.  In  America,  256,  342. 
In  Australia,  294,  295. 

Woollens,  manufacture  of,  in  England,  276,  277,  279,  280,  348.  In  Canada, 
291.     In  Australia,  297.    In  Ireland,  298-9,  301.    In  France,  269,  276. 


INDEX. 


419 


In  Germany,  328.     In  Russia,  331.     In  Portugal,  334,  336.     In  America, 

256,  .342,  347,  351,  357-8. 
Yarranton,  Andrew,  16,  278. 
Yeatos,  Dr.,  336. 

Yeomanry  in  England,  76,  77.     Its  dooline,  78.     Growth  elsewhere,  86. 
Young,  Arthur,  86,  109,  124,  207. 
ZcUverein,  282,  325-9. 
Zumpt,  60. 


'UH17BRSIT7] 


THE  END. 


l^amous  ^Qstlemon  *fioo''S- 


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Illustrated.     i6mo 2  25 

Snagged  and    Sunk;    or,  The  Adventures  of   a 

Canvas  Canoe.     Illustrated.     i6mo I  25 

Steel  Horse ;  or.  The  Rambles  of  a  Bicycle.  Illus- 
trated.    i6mo I  25 

OUR  FELLOWS ;  or.  Skirmishes  with  the  Swamp 
Dragoons.    By  Harry  Castlemon.    Illustrated.    i6mo.      i  25 


J^lgep's  ^enotoneb  flo^'^^* 


Horatio  Alger,  Jr.,  has  attained  distinction  as  one  of  the  most  popular 
writers  of  books  for  boys,  and  the  following  list  comprises  all  of  his  best 
boolcs. 


By  Horatio  Alger,  Jr. 

RAGGED   DICK   SERIES.     By  Horatio  Alger,         * 
Jr.     In  box  containing  the  following.     6  vols.     l6mo. 
Cloth,  extra,  black  and  gold  * $7  SO 

Ragged  Dick ;  or,  Street  Life  in  New  York.  Illus- 
trated.   i6mo I  25 

Fame  and  Fortune  ;  or,  The  Progress  of  Richard 

Hunter.     Illustrated.     i6mo i  25 

Mark  the  Match  Boy ;  or,  Richard  Hunter's  Ward, 

Illustrated.     i6mo.  .    .   * I  25 

Rough  and  Ready ;  or,  Life  among  the  New  York 

Newsboys.     Illustrated.     i6mo i  25 

Ben  the  Luggage  Boy;  or,  Among  the  Wharves. 

Illustrated.     i6mo i  25 

Rufus  and  Rose ;  or,  The  Fortunes  of  Rough  and 

Ready.     Illustrated.     i6mo i  25 

TATTERED  TOM  SERIES.  (First  Series.) 
By  Horatio  Alger,  Jr.  In  box  containing  the  following. 
4  vols.     i6mo.     Cloth,  extra,  black  and  gold  ....      5  GO 

Tattered  Tom ;  or.  The  Story  of  a  Street  Arab.  Il- 
lustrated.    i6mo I  25 

Paul  the  Peddler;  or.  The  Adventures  of  a  Young 

Street  Merchant.     Illustrated.     i6mo .      i  25 

Phil  the  Fiddler ;  or,  The  Young  Street  Musician. 

Illustrated.     i6mo I   25 

Slow  and  Sure ;  or.  From  the  Sidewalk  to  the  Shop. 

Illustrated.     i6mo I  25 

4 


PORTER  &  COATES'S   POPULAR  JUVENILES.  $ 

TATTERED  TOM  SERIES.  (Second  Series.) 
In  box  containing  the  following.  4  vols.  Cloth, 
extra,  black  and  gold ^5  00 

Julius;   or,  The   Street   Boy  Out  West.     Illustrated. 

i6rao I   25 

The  Young  Outlaw  ;  or.  Adrift  in  the  World.  Il- 
lustrated.    i6mo I  25 

Sam's  Chance  and  How  He  Improved  It.  Il- 
lustrated.    i6ino I  25 

The  Telegraph  Boy.     Illustrated.     i6mo i  25 

LUCK  AND  PLUCK  SERIES.  (First  Series.) 
By  Horatio  Alger,  Jr.  In  box  containing  the  following. 
4  vols.     i6mo.     Cloth,  extra,  black  and  gold  ....      5  00 

Luck  and  Pluck  ;  or,  John  Oakley's   Inheritance. 

Illustrated,     i6mo I  25 

Sink  or  Swim ;  or,  Harry  Raymond's  Resolve.  Il- 
lustrated.    i6mo I   25 

Strong  and  Steady ;  or.  Paddle  Your  Own  Canoe. 

Illustrated.     i6mo i  35 

Strive  and  Succeed ;  or.  The  Progress  of  Walter 

Conrad,     Illustrated.     i6mo,     .    , i  25 

LUCK  AND  PLUCK  SERIES,  (Second 
Series.)  In  box  containing  the  following.  4  vols. 
i6mo.     Cloth,  extra,  black  and  gold 5  00 

Try  and  Trust ;  or.  The  Story  of  a  Bound  Boy.  Il- 
lustrated.    i6mo I   25 

Bound  to  Rise;  or,  Harry  Walton's  Motto.  Illus- 
trated.    i6mo I  25 

Risen  from  the  Ranks ;  or,  Harry  Walton  s  Success. 

Illustrated.     i6mo i  25 

Herbert  Carter's  Legacy;  or.  The  Inventor's  Son. 

Illustrated.     i6mo I   25 

CAMPAIGN    SERIES.     By  Horatio  Alger,  Jr. 
In   box   containing  the   following.      3   vols.      i6mo. 
Cloth,  extra,  black  and  gold 375 

Frank's  Campaign;  or.  The  Farm  and  the  Camp. 

Illustrated.     i6mo i  25 

Paul  Prescott'a  Charge.     Illustrated.     i6mo.    .    .      i  25 

Charlie  Codman's  Cruise.     Illustrated.     r6mo.  .    .      i  25 


6  PORTER  &  COATES'S  POPULAR  JUVENII<ES. 

BRAVE  AND  BOLD  SERIES.  By  Horatio 
Alger,  Jr.  In  box  containing  the  following.  4  vols. 
i6ino.     Cloth,  extra,  black  and  gold i?S  00 

Brave  and  Bold ;  or,  The  Story  of  a  Factory  Boy. 

Illustrated.     l6mo I  25 

Jack's   Ward ;  or,  The  Boy  Guardian.     Illustrated. 

i6mo - I  25 

Shifting  for  Himself;  or,  Gilbert Greyson's  Fortunes. 

Illustrated.     i6mo. ' i  25 

Wait  and  Hope ;  or,  Ben  Bradford's  Motto.  Illus- 
trated.    i6mo I  25 

PACIFIC  SERIES.    By  Horatio  Alger,  Jr.    4  vols. 

l6mo.     Cloth,  extra,  black  and  gold 5  00 

The  Young  Adventurer ;  or,  Tom's  Trip  Across  the 

Plains.     Illustrated.     i6mo i  25 

The  Young  Miner ;  or,  Tom  Nelson  in  California. 

Illustrated.     i6mo i  25 

The  Young  Explorer;  or,  Among  the  Sierras.  Il- 
lustrated.    i6mo I  25 

Ben's  Nugget;  or,  A  Boy's  Search  for  Fortune.    A 

Story  of  the  Pacific  Coast.     Illustrated.     i6mo.  .    .    .       i  25 

ATLANTIC  SERIES.     By  Horatio  Alger,  Jr.     4 

vols.      l6mo.     Cloth,  extra,  black  and  gold 5  00 

The   Young   Circus   Rider ;   or.  The  Mystery  of 

Robert  Rudd.     Illustrated.     i6mo i  25 

Do  and  Dare ;  or,  A  Brave  Boy's  Fight  for  Fortune. 

i6mo I  25 

Hector's  Inheritance  ;  or.  Boys  of  Smith  Institute. 

i6mo I  25 

Helping  Himself;  or,  Grant  Thornton's  Ambition. 

i6mo I  25 

NEW  VOLUMES. 

The  Store  Boy  ;  or.  The  Fortunes  of  Ben  Barclay. 
By  Horatio  Alger,  Jr.  Illustrated.  i6mo.  Cloth, 
extra,  black  and  gold I  25 

Bob  Burton  ;  or,  The  Young  Ranchman  of  the  Mis- 
.souri.  By  Horatio  Alger,  Jr.  Illustrated.  i6mo. 
Cloth,  extra,  black  and  gold I  25 


PORTER  &  COATES'S  POPULAR  JUVENILES.        7 

By  C.  A.  Stephens. 

Rare  books  for  boys — bright,  breezy,  wholesome  and  instructive;  full  of 
adventure  and  incident,  and  information  upon  natural  history.  I'hey  blend 
instruction  with  amusement — contain  much  uselul  and  valuable  information 
upun  the  habits  of  animals,  and  plenty  of  adventure,  fun  andjollity. 

CAMPING  OUT  SERIES.  By  C.  A.  Stephens. 
In  box  containing  the  following.  6  vols.  i6mo. 
Cloth,  extra,  black  and  gold $7  SO 

Camping  Out.  As  recorded  by  «  Kit."  With  eight 
full-page  illustrations.      i6mo i  25 

Left  on  Labrador ;  or,  The  Cruise  of  the  Schooner 
Yacht  "  Curlew."  As  recorded  by  "  Wash."  With 
eight  full -page  illustrations.     161110 I  25 

Oflf  to  the  Geysers  ;  or.  The  Young  Yachters  in 
Iceland.  As  recorded  by  "Wade."  With  eight  full- 
page  illustrations.     i6mo i  25 

Lynx  Hunting.  From  Notes  by  the  Author  of 
"  Camping  Out."  With  eight  full-page  illustrations. 
l6mo I  25 

Fox  Hunting.    As  recorded  by  «  Raed."   With  eight 

full-page  illustrations.     i6mo I  25 

On  the  Amazon  ;  or,  the  Cruise  of  the  "Rambler." 
As  recorded  by  "  Wash."  With  eight  full-page  illus- 
trations.   i6mo ,   ^    .    .    .      I  25 


By  J.  T.  Trowbridge. 


These  stories  will  rank  among  the  best  of  Mr.  Trowbridge's  books  for  the 
young — and  he  has  written  some  of  the  best  of  our  juvenile  literature. 

JACK  HAZARD  SERIES.  By  J.  T.  Trowbridge. 
In  box  containing  the  following.  6  vols.  l6mo. 
Cloth,  extra,  black  and  gold 7  So 

Jack  Hazard  and  His  Fortunes.    With  twenty 

illustrations.     i6mo i  25 

A  Chance  for  Himself;  or,  Jack  Hazard  and  his 

Treasure.    With  nineteen  illustrations.     i6mo.  ...      i  25 


8        PORTER  &  COATES'S  POPULAR  JUVENILES. 

Doing  His  Best.     With  twenty  illustrations.     i6mo.  ^i  25 

Fast  Friends.    With  seventeen  illustrations.     i6mo.     i  25 

The  Young  Surveyor ;  or,  Jack  on  the  Prairies. 
With  twenty-one  illustrations.     i6mo i  25 

Lawrence's  Adventures  Among  the  Ice  Cut- 
ters, Glass  Makers,  Coal  Miners,  Iron  Men  and  Ship 
Builders.    With  twenty-four  illustrations.     i6mo.  .    .      i  25 


By  Edward  S.  Ellis. 


A  New  Series  of  Books  for  Boys,  equal  in  interest  to  the  "Castlemon" 
and  "  Alger"  books.  His  power  of  description  of  Indian  life  and  character 
is  equal  to  the  best  of  Cooper. 

BOY  PIONEER  SERIES.  By  Edward  S.  Ellis. 
In  box  containing  the  following.  3  vols.  Illustrated. 
Cloth,  extra,  black  and  gold ^3  75 

Ned  in  the  Block  House ;  or.  Life  on  the  Frontier. 

Illustrated.     i6mo i  35 

Ned  in  the  "Woods.    A  Tale  of  the  Early  Days  in 

the  West.     Illustrated.     i6mo i  25 

Ned  on  the  River.     Illustrated.     i6mo i  25 

DEERFOOT  SERIES.  By  Edward  S.  Ellis.  In 
box  containing  the  following.  3  vols.  Illustrated. 
i6mo 3  75 

Hunters  of  the  Ozark.     Illustrated.     i6mo.    ...      i  25 

Gamp  in  the  Mountains.     Illustrated.     i6mo.   .    .      i  25 

The  Last  "War  Trail.     Illustrated.     i6mo i  25 

LOG  CABIN  SERIES.  By  Edward  S.  Ellis,  In 
box  containing  tlie  following.  3  vols.  Illustrated. 
l6mo 3  75 

Lost  Trail.     Illustrated.     i6mo i  25 

Camp-Fire  and  "Wigwam.     Illustrated.     i6mo.    .      i  25 

Footprints  in  the  Forest.     Illustrated,    i6mo.  .   .      i  25 


THE 


f  Tpcsibe  GncyclopQebiQ  of  poetry 

COLLECTED  AND  ARRANGED 
By    HENRY    X.    COA-TES. 


27th  edition,  enlarged  and  thoroughly  revised,  and  containing 
portraits  of  prominent  American  poets,  with  fac- 

similp*  nf  tVipir  TinnHurritincr 


'Jl      I^X  WXXlILJV^lil.       J  LlXi\^t  i^^dli       LfWV-L. 

similes  of  their  handwriting, 


Imperial  8vo.,  cloth,  extra,  gilt  side  and  edges    .    .  $5  00 

Half  calf,  gilt 7  50 

Half  morocco,  antique,  gilt  edges 7  So 

Turkey  morocco,  antique,  full  gilt  edges 10  00 

Tree  calf 12  00 

Plush,  padded  sides,  nickel  lettering 14  00 

The  remarkable  success  that  has  attended  the  publication  of 
"The  Fireside  Encyclopaedia  of  Poetry" — 26  editions  having 
been  printed — has  induced  the  author  to  thoroughly  revise 
it,  and  to  make  it  in  every  way  worthy  of  the  high  place  it 
has  attained.  About  one  hundred  and  fifty  new  poems  have 
been  inserted,  and  the  work  now  contains  nearly  fourteen  hun- 
dred poems,  representing  four  hundred  and  fifty  authors,  English 
and  American.  The  work  is  now  illustrated  by  finely-engraved 
portraits  of  many  prominent  poets,  with  their  signatures  and  fac- 
similes of  their  handwriting. 


X^lje  Cl?il^^^n's  ^ooh  of  poetry. 

Compiled  by  Henry  T.  Coates. 

"With  nearly  200  illustrations.      The  most  complete  collection 
of  poetry  for  children  ever  published.    4to. 

Cloth,  extra,  gilt  edges , 300 

Full  Turkey  morocco,  gilt  edges •••••     750 


THE  HANDSOMEST  AND  CHEAPEST  GIFT  BOOKS. 

^I^e  "jgells"  3eries. 


The  "  BELLS  "  Series  has  been  undertaken  by  the  publishers  with  a  view 
to  issue  original  illustrated  poems  of  a  high  character,  at  a  price  within  the 
reach  of  all  classes. 

Small  4to.     Cloth,  gilt  edges |i  5° 

Ivory  surface 150 

Embossed  calf,  gilt  edges i  50 

GEMS  FROM  TENNYSON. 

By  Alfred  Tennyson.    Elegantly  illustrated  by  Hammatt  Billings. 

BEAUTIES  OF  TENNYSON. 

By  Alfred  Tennyson.  Elegantly  illustrated  with  twenty  engravings,  fronj 
original  drawings  by  Frederic  B.  Scbell.  Beautifully  printed  on  the  finest 
plate  paper. 

FROM  GREENLAND'S  ICY  MOUNTAINS. 

By  Bishop  Heber.  Elegantly  illustrated  with  twenty-two  engravings,  from 
original  drawings  by  Frederic  B.  Schell.  Beautifully  printed  on  the  finest 
plate  paper. 

LADY  CLARE. 

By  Alfred  Tennyson.  Elegantly  illustrated  with  twenty-twx»  engravings, 
from  original  drawings  by  Alfred  Fredericks,  F.  S.  Church,  Harry  Fenn, 
F.  B.  Schell,  E.  P.  Garret  and  Granville  Perkins.  Beautifully  printed  o» 
the  finest  plate  paper. 

THE  NIGHT  BEFORE  CHRISTMAS. 
By  Clement  C.  Moore.     Never  before  has  this  popular  poem — ^a  favorite 
with  both  the  old  and  the  young — been  presented  in  such  a  beautiful  dress. 
It  is  elegantly  illustrated  with  twenty-two  engravings ,  from  original  draw- 
ings by  F.  B.  Schell,  W.  T.  Smedley,  A.  Fredericks  and  H.  R.  Poore. 

BINGEN  ON  THE  RHINE. 

By  Caroline  E.  Norton.  Elegantly  illustrated  with  twenty-two  en- 
gravings, from  original  drawings  by  W.  T.  Smedley,  F.  B.  Schell,  A. 
Fredericks,  Granville  Perkins  and  E.  P.  Garrett. 


THE  BELLS. 

By  Edgar  Allan  Poe.  Elegantly  illustrated  with  twenty-two  engravings, 
from  original  drawings  by  F.  O.  C.  Darky,  A.  Fredericks,  Granvillo 
Perkins  and  others. 

THE  DESERTED  VILLAGE. 

By  Oliver  Goldsmith.  Elegantly  illustrated  with  thirty-five  engravings, 
from  drawings  by  Hammatt  Billings. 

THE  COTTER'S  SATURDAY  NIGHT. 
By  Robert  Burns.    Elegantly  illustrated  with  fifty  engravings,  from  draw- 
ings by  Chapman. 

zo 


^tanbarb    J^istories. 


History  of  England,  from  the  Accession  of 
James  the  Second.  By  Thomas  Babington 
Macaulay.  Standard  edition.  "With  a  steel  portrait 
of  the  author  Printed  from  new  electrotype  plates 
from  the  last  English  edition.  Being  by  far  the  most 
correct   edition  in   the   American   market.     5    vols., 

l2mo.     Cloth,  extra,  per  set ^5  00 

Sheep,  marbled  edges,  per  set 7  50 

Half  Russia  (imitation),  marbled  edges 7  50 

Half  calf,  gilt lo  oo 

History  of  the  Decline  and  Fall  of  the  Roman 
Empire.  By  Edward  Gibbon.  With  notes  by  Rev. 
H.  H.  Milman.  Standard  edition.  To  which  is 
added  a  complete  Index  of  the  work.  A  new  edition 
from  entirely  new  stereotype  plates.     With  portrait  on 

steel.     5  vols.,  i2mo.     Cloth,  extra,  per  set 5  00 

Sheep,  marbled  edges,  per  set 7  50 

Half  Russia  (imitation),  marbled  edges, 7  50 

Half  calf,  gilt,  per  set 10  00 

History  of  England,  from  the  Invasion  of 
Julius  Caesar  to  the  Abdication  of  Jamea 
the  Second,  1688.  By  David  Hume.  Standard 
edition.  With  the  author's  last  corrections  and  im- 
provements, to  which  is  prefixed  a  short  account  of  his 
life,  written  by  himself.  With  a  portrait  on  steel.  A 
new  edition  from  entirely  new  stereotype  plates.     5 

vols.,  i2mo.     Cloth,  extra,  per  set 5  00 

Sheep,  marbled  edges,  per  set 7  5° 

Half  Russia  (imitation),  marbled  edges 7  50 

Half  calf,  gilt 10  00 


^[J)]^iscellQneous, 


A  Dictionary  of  the  Bible.  Comprising  its  An- 
tiquities, Biography,  Geography,  Natural  History  and 
Literature.  Edited  by  WilHam  Smith,  LL.D,  Re- 
vised and  adapted  to  the  present  use  of  Sunday-school 
Teachers  and  Bible  Students  by  Revs.  F.  N.  and 
M.  A.  Peloubet.    With  eight  colored  maps  and  440 

engravings  on  wood.     8vo.     Cloth,  extra ;^2  00 

Sheep,  marbled  edges 3  00 

Half  morocco,  gilt  top  ..,.....,,,..      3  50 

History  of  the  Civil  War  in  America.     By  the 

Comte  de  Paris.  Translated  with  the  approval  of  the 
author.  With  maps  faithfully  engraved  from  the  origi- 
nals, and  printed  in  three  colors.     8vo. 

Cloth,  extra,  per  vol 3  50 

Red  cloth,  extra,  Roxburgh  style,  uncut  edges,  per  vol.     3  50 

Sheep,  library  style,  per  vol 4  5° 

Half  Turkey  morocco,  per  vol .      6  00 

Volumes  I,  II,  III  and  IV  now  ready,  put  up  in  a  neat 
box,  or  any  volume  sold  separately. 

The  Battle  of  Gettysburg.  By  the  Comte  de  Paris. 
With  maps.     8vo.     Cloth,  extra I  50 

Comprehensive  Biographical  Dictionary.  Em- 
bracing accounts  of  the  most  eminent  persons  of  all 
ages,  nations  and  professions.  By  E.  A.  Thomas. 
Crown  8vo. 

Cloth,  extra,  gilt  top 2  50 

Sheep,  marbled  edges »..      300 

Half  morocco,  gilt  top 3  50 

Half  Russia,  gilt  top 4  50 

The  Amateur  Photographer.  A  manual  of  photo- 
graphic manipulations  intended  especially  for  begin- 
ners and  amateurs,  with  suggestions  as  to  the  choice  of 
apparatus  and .  of  processes.  By  Ellerslie  Wallace, 
Jr.,  M.D,  New  edition,  with  two  new  chapters  on 
paper  negatives  and  microscopic  photography.     lamo. 

Limp  morocco,  sprinkled  edges I  00 

xa 


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